What Happened?
Shares of equipment rental company Herc Holdings (NYSE: HRI) fell 3.9% in the afternoon session after the broader market pulled back, with major U.S. stock indices all trading in the red. The move came as investors considered concerns about an ongoing government shutdown. On the day, the S&P 500 index saw its first drop in eight days, declining by 0.4%. The Nasdaq Composite fell 0.7%, and the Dow Jones Industrial Average also slipped 0.2%. This wider market weakness appeared to weigh on individual stocks, including those in the equipment rental sector.
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 Herc? Access our full analysis report here.
What Is The Market Telling Us
Herc’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 4.6% on the news that Baird upgraded the stock to 'Outperform' from 'Neutral' and raised its price target. The research firm lifted its price view on Herc to $160 from $137. This decision was based on seeing signs that the equipment rental industry was stabilizing, a trend expected to last into 2026. The analyst, Mircea Dobre, also pointed out that Herc's efforts to manage costs and its fleet after the H&E acquisition were improving the company's prospects. These factors were expected to help the company gradually reduce its debt, which could increase the value of its stock for investors.
Herc is down 34.7% since the beginning of the year, and at $121.50 per share, it is trading 49.2% below its 52-week high of $239.28 from November 2024. Investors who bought $1,000 worth of Herc’s shares 5 years ago would now be looking at an investment worth $2,667.
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