Herc Rentals Earnings: Solid Demand Leads to a Good Start in 2024; Shares Slightly Undervalued

Herc reported solid performance in the first quarter. The market reacted positively by sending Herc’s shares up nearly 3.5% in intraday trading. Following the earnings update, we raised our fair value estimate by 5% to $166 per share, up from $158. Based on our cash flow projections, we think Herc’s shares are 8% undervalued. We have become more optimistic about the company’s prospects over the past couple of quarters. Demand has moderated from high levels but remains positive.