Citi initiates Herc with 'buy' on deal synergies

H&E Equipment Services

24/03/2025 10:55

** 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

 (Reporting by Ateev Bhandari in Bengaluru)

 ((Ateev.Bhandari@thomsonreuters.com;))