Shares of auto rental companies Hertz Global Holdings Inc (NASDAQ:HTZ) and Avis Budget Group Inc (NASDAQ:CAR) surged on Thursday following the announcement of a 25% tariff on imported cars and key auto parts by President Donald Trump.
What To Know: Unlike automakers and parts suppliers facing rising costs, rental car companies stand to benefit as higher vehicle prices could drive greater demand for rentals.
With tariffs projected to increase new car prices by $5,000 to $15,000, consumers may delay purchases and turn to rental services for short-term mobility needs. This shift in consumer behavior could boost revenue for Hertz and Avis, which already maintain large fleets and can adjust rental pricing to capture higher demand.
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What Else: Additionally, higher new car costs may slow fleet turnover, potentially improving depreciation metrics and reducing capital expenditures for both companies.
Hertz and Avis, with their established networks and fleet management expertise, could see improved utilization rates and stronger pricing power.
As consumers and businesses reconsider vehicle ownership in a high-cost environment, rental car companies may emerge as unexpected winners from the new tariff policy.
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Price Action:
- Hertz shares are trading higher by 19.6% to $4.12 Thursday afternoon.
- Avis Budget Group shares are trading higher by 19.3% to $73.42 Thursday afternoon.
How To Buy HTZ Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Hertz’s case, it is in the Industrials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
According to data from Benzinga Pro, HTZ has a 52-week high of $8.20 and a 52-week low of $2.47.
