What Happened?
Shares of global car rental company Hertz (NASDAQ: HTZ) fell 27.6% in the morning session after the company reduced its second-quarter earnings forecast and announced plans to raise capital through stock and debt offerings.
Hertz lowered its second-quarter Adjusted Corporate EBITDA outlook to a range of $50 million to $80 million, citing unexpected weakness in the used car market. The company explained that softness in May turned vehicle sale gains from April into losses, increasing its depreciation costs.
Compounding the negative outlook, Hertz also announced plans for two separate offerings: $300 million in exchangeable senior notes and $100 million in common stock. These capital-raising efforts, combined with the weaker earnings forecast, fueled investor concerns, leading to the significant sell-off.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Hertz? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Hertz’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. But moves this big are rare even for Hertz and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 5.4% on the news that the CPI report showed 4.2% annual inflation, the highest in three years, with markets fully pricing a December Fed rate hike. For capital-intensive industrial businesses, tighter financing conditions directly crimp investment planning and acquisition economics.
The Iran conflict added supply chain pressure: Tehran targeted Bahrain, Kuwait, and Jordan with missile attacks, and Trump pledged mid-session to "attack very hard," sending the Dow to session lows.
A widening Gulf conflict raises energy input costs and introduces uncertainty across the cross-border logistics networks that manufacturing-heavy industrials depend on. Companies with exposure to global trade flows absorbed the most pressure. Defense names within the sector remained partially insulated.
Hertz is down 30% since the beginning of the year, and at $3.66 per share, it is trading 54.1% below its 52-week high of $7.97 from July 2025. Investors who bought $1,000 worth of Hertz’s shares 5 years ago would now be looking at only $135.42.
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