Investing.com -- Hertz Global Holdings (OTC:HTZGQ) first-quarter results are likely to be more "challenging" than expected, underscored by the rental car company's recent leadership change as it pivots away from electric vehicles.
"We would prepare for a more challenging 1Q result and potentially more actions needed to address fleet challenges," analysts at Morgan Stanley said in a Monday note, ahead of the company's result expected Apr. 25.
Hertz said Friday it had appointed Gil West as chief executive officer starting April 1, succeeding Stephen Scherr, who had decided to step down. This recent leadership change shows a "more 'hands-on' approach is needed to steer the rental car company through its pivot away from EVs," the analysts said.
The rental car company has faced a tough backdrop after writing down the value of its EV fleet amid waning demand and higher repair costs.
Yet, there's hope, Morgan Stanley adds, noting that changes in management "is frequently an important catalyst for a turnaround. Hertz can "successfully address its fleet and other operational
issues," the analysts said, but "earnings and cash flow have yet to reach a nadir."
As a former chief operating officer of Delta, West -- who will become the the company's seventh CEO since 2014 -- has the "industry experience in the travel/consumer space should align well with HTZ’s business model," Oppenheimer said.
Hertz Global Holdings Inc (NASDAQ:HTZ) fell more than 4% adding to losses of about 29% year to date.