Citi initiates Herc with 'buy' on deal synergies

Citi Research starts coverage on industrial equipment rental company Herc Holdings HRI.N with "buy" rating

Brokerage sets PT at $165, representing ~18% upside to the stock's last close

"We view valuation as attractive at current levels and think a strong case can be made for multiple expansion as deal synergies are captured and HRI pays down debt from the H&E deal over the next few years" - Citi

Brokerage adds that HRI will capture 100% of its targeted cost synergies and 75% of its targeted revenue synergies from the pending H&E acquisition

Says concerns about co's leverage post the H&E deal may be overblown

Five of 9 brokerages rate stock "buy" or higher, 3 "hold", and 1 "sell"; their median PT is $241 - according to data compiled by LSEG

Stock down ~28.4% YTD, as of last close; HRI rose ~27.2% in 2024