Hertz Global stock headed toward its worst drop on record after the used-car rental company warned that soft demand would hit its adjusted earnings.

Hertz said Wednesday that it projects second-quarter adjusted corporate earnings before interest, taxes, depreciation and amortization of $50 million to $80 million, toward the lower end of the company's expected range.

Net monthly depreciation -- the amount of value a rental vehicle loses each month -- is expected to hit roughly $300 per unit for the quarter. In a securities filing, Hertz blamed "unexpected softness in the used car market" for driving up depreciation costs.

The company said last month that it expected the metric to fall well below $300 per month, driven by anticipated gains from second-quarter vehicle sales.

Shares sank 27% to $3.69 on Wednesday, putting Hertz on track for its largest-ever same-day percentage decline as well as its lowest close since April 2025, according to Dow Jones Market Data.

Only adding to the pain, Hertz disclosed plans for a $100 million public stock offering alongside a concurrent $300 million offering of payment-in-kind notes.

Under the arrangement, Hertz will loan the shares to underwriter J.P. Morgan Securities so investors can create short positions to hedge their note purchases. While Hertz will use the proceeds from the notes to repay outstanding debt, it will receive only a nominal lending fee -- and no direct proceeds -- from the stock sale itself.

Wednesday's slump adds to a months-long bad run for Hertz shares. Counting the latest losses, the stock has fallen 28% this year and nearly 50% over the past 12 months. The small-cap S&P 600, of which Hertz is a component, has gained, over the same periods, more than 19% and 34%, respectively.

Hertz has spent the past year streamlining its operations, updating its fleet, and working to improve the financial health of its business. The company has taken steps to restore investor confidence, which includes striking big-name partnerships. Shares popped in April after Hertz disclosed two agreements with Uber Technologies to support Uber's robo-taxi ambitions.

By and large, Hertz has been going through a rough patch. While the stock initially surged due to travel disruptions during a partial government shutdown, it tumbled once President Trump signed an order to pay Transportation and Security Administration employees, signaling an end to the chaos.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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June 24, 2026 10:57 ET (14:57 GMT)

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