Replies to post #155 on Avis Budget Group Inc (CAR)

[JohnCM]

Hertz's stock suffers record selloff, as Moody's cuts rating as COVID-19 creates 'severe' credit shock

Published: March 18, 2020
By Tomi Kilgore

Shares of Hertz Global Holdings Inc. HTZ, +11.13% plummeted 39.6% on Wednesday to close at a record low of $3.38, as the COVID-19 pandemic weighed heavily on the car rental company. The day's decline was the biggest since the stock went public in November 2006. Moody's Investors Service downgraded Hertz's credit to B3, which is six notches deep into speculative, or "junk" territory, from B2, as the outlook was revised to negative from stable.

The rating agency said the deteriorating economic outlook, falling oil prices and asset price declines resulting from the rapid spread of the COVID-19 virus has created "a severe and extensive" credit shock across many sectors and markets. "The car rental sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment," Moody's said. "More specifically, the weaknesses in Hertz's credit profile, including its exposure to Europe have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and the company remains vulnerable to the outbreak continuing to spread."

Shares of Hertz rival Avis Budget Group Inc. CAR, +12.26% plunged 36.0% to an 11-year low, as they suffered their worst day since they dropped a record 46.5% on April 16, 1998. Over the past month, Hertz shares have shed 82.7%, Avis's stock has tumbled 81.2% and the S&P 500 SPX, -0.16% has lost 28.8%.