NEW YORK, June 24, 2026, 12:06 EDT
- Hertz shares drop almost 28% after the company said its Q2 core profit will come in near the low end of guidance.
- Used-car sale losses have moved expected vehicle depreciation up to around $300 per unit each month
- Hertz is looking to issue $300 million in PIK notes tied to a $100 million share-lending arrangement
Hertz Global Holdings shares dropped almost 28% by midday Wednesday on Nasdaq. The rental-car company said second-quarter core profit will hit the low end of its outlook after losses from selling used cars.
Hertz shares traded down 28.5% to $3.62 near 11:50 a.m. EDT, matching the session low. Volume reached 26.6 million shares. Barron’s, referencing Dow Jones Market Data, said the loss was on pace to be Hertz’s worst single-day percentage drop and lowest close since April 2025.
Hertz is now looking for fleet size, revenue, revenue per day and rental days to come in at or a bit above the forecasts it gave before. Revenue per day means what Hertz makes on average per rental day. The trouble is with used-car sales. Losses in May, after earlier gains in April, are on track to push net depreciation per unit per month to roughly $300, Hertz said. Net depreciation per unit is how much value each rental car loses per month after counting any sales gains or losses.
Hertz is now looking for adjusted corporate EBITDA of $50 million to $80 million. The company said these are early numbers, unaudited, and might shift before the quarter wraps up. Adjusted corporate EBITDA strips out interest, taxes, depreciation, amortization and some other company tweaks.
Hertz said its Hertz Corp arm is looking to sell $300 million in exchangeable senior first-lien secured PIK notes maturing in 2030. PIK notes pay some interest by adding it to what’s owed, instead of paying cash. The firm said it could use the proceeds for general corporate uses, which might include paying down debt.
Hertz is set to launch a $100 million common stock offering, with shares loaned out to J.P. Morgan Securities. The proceeds from the sale go to J.P. Morgan or affiliates, not directly to Hertz, which will collect only a nominal lending fee. Hertz noted these borrowed shares could be sold short to help note investors hedge their risk.
The quarter isn’t done. Used-car values are still soft, so Hertz could see more strain on depreciation and cash if that keeps up through summer. But if vehicle prices rebound, the impact on core profit might shrink.
Used-car prices are all over the place. Cox Automotive’s Manheim Used Vehicle Value Index for mid-June was up 0.6% from May when adjusted, but it said non-adjusted wholesale prices dropped 0.8%. “Manheim values continue their normal pattern of declining at this time of year,” Cox Automotive chief economist Jeremy Robb said. Cox Automotive Inc.
Avis Budget Group shares dropped 4.1% to $182.59. Investing.com reported that Avis fell after Hertz lowered its second-quarter forecast and announced a capital raise.
Hertz posted first-quarter revenue of $2.0 billion in May, an 11% gain. Net loss came in at $333 million, better than the $443 million loss posted a year earlier. CEO Gil West then said the company had made “meaningful progress across revenue, asset efficiency, and unit economics.” businesswire.com
