Hertz's value expected to rise with auto tariffs, Ackman optimistic

From Yahoo Finance: 2025-04-18 14:19:00

Bill Ackman’s Pershing Square Capital Management has acquired a 19.8% stake in Hertz Global Holdings Inc., banking on the company’s turnaround plan and potential tariff-induced vehicle value increase. Hertz shares surged 44% in two days, and CEO Gil West expressed gratitude for Ackman’s support. The company aims to capitalize on rising used-car prices due to Trump’s auto import tariffs.

Ackman envisions Hertz reaching $30 a share by 2029, with strategic revenue and operating expense targets. The company’s fleet utilization needs to hit 85%, a level historically around 80%. Ackman’s optimism contrasts with analysts’ caution, as six rate Hertz shares as a hold and four recommend selling. Carl Icahn’s failed investment in Hertz serves as a cautionary tale.

Despite Ackman’s long-term optimism, he has low expectations for Hertz’s upcoming results. He also proposed a futuristic scenario of Hertz managing a fleet of self-driving vehicles for Uber. Uber CEO Dara Khosrowshahi responded positively, expressing excitement about expanding their collaboration. Ackman cautioned investors about the risks of investing, emphasizing the absence of guarantees for success.



Read more at Yahoo Finance: Hertz Wins Over Ackman in a Bet Tariffs Will Boost Value of Cars