Inflation's Stubborn Return: Wholesale Prices Surge Signals Persistent Price Pressures

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**SPEAKER_2** (2:01)
On radio, on YouTube, streaming live on invest talk.com, and for our podcast subscribers, this is Invest Talk. Independent thinking, shared success. Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States. Here is KPP Financial portfolio manager, Luke Guerrero.

**Luke Guerrero** (2:32)
Good afternoon, fellow investors, and welcome back to the Friday, March 6th, 2026 edition of Invest Talk. I'm your host, Luke Guerrero, and I'll be with you over this next hour as we dissect market news, talk about market performance, and answer your finance and investment questions. And oh, by the way, if you haven't heard, Market Madness is already here. So I want to let all of those out there who want to potentially have the chance to win $1,000 or $1,500, if you follow us on YouTube, to head over to investtalk.com to submit their Market Madness Bracket today. All righty, in just a bit, we'll talk about today's market performance and run down those show topics. But why don't we kick things off by answering a fresh-collar question now. Hi there.

**SPEAKER_4** (3:21)
I'm interested in your analysis of Hertz Global, ticker HTZ, and the turnaround narrative.

**SPEAKER_5** (3:29)
Thank you.

**Luke Guerrero** (3:30)
Ticker HTZ is Hertz Global. It is the world's largest car rental brand. It's about $1.3 billion market cap way off of its highs back in 2021 of $34 a share, now trading down at $4.12, $4.12 that is. It's not just Hertz, it's Hertz, it's dollar, it's thrifty. It's a 500,000 vehicle fleet that has a very airport-heavy footprint globally when I was recently in New Zealand. We used a Hertz rental car there. Now it emerged from bankruptcy in June of 2021 and it's still carrying some pretty hefty leverage, $15.8 billion in long-term debt, negative free cashflow that is projected to be positive next year. In spite of that, it's still projected to lose money. It has not made money since December of 2023
Now in terms of guidance, they did guide a little bit lower than what was expected in their most recent quarterly earnings, but there are some things that are positive. I feel like I've been harping on the negative here. Let's talk about the positive. Well, the turnaround is pretty real. They have over $1 billion in EBITDA improvement in a single year. That's not noise. They have rotated out of their ill-advised disaster with Tesla because who wants to, on vacation, spend time charging their vehicle that didn't make any sense at all to their 500,000 optimized fleet. So they solved that problem. Their car sales, probably on the back of the fact that they bought a bunch of electric cars, which was once again a stupid idea, has made them one of the largest, one of the top five used car dealers by volume in the United States. And so that has led to utilization of a fleet that was not wanted. They also have had a bit of a liquidity enhancement in terms of their pipeline. 200 million in financing plus 500 million in other opportunities and another 400 million in Furslane capacity that they refinanced in June at a lower rate, which has freed up some of that liquidity crunch. But there are risks. Liquidity is expected to dip in Q2 2026 below 1 billion in unrestricted cash. They are still burning. Free cash, free cash flow was not positive and is unlikely to be positive until next year at the earliest. They have, as I mentioned, that massive, massive leverage. And in a way, there is still a bit of a hangover from the Tesla EV debacle. It cost them billions in impairments and set them back probably two to three years. And then there's the thin float and the stigma of bankruptcy, the rising cost of insurance. Bottom line is they are executing a genuine operating turnaround. You have seen in a lot of ways they have stopped the bleeding. But at the same time, there are still some structural weaknesses in this company that could lead you to say, okay, high risk, high reward. It's certainly not for the faint of heart. It's beta is currently sitting it around two. But given those issues, until I see some meaningful turnaround and a move towards at least having positive free cash flow, it seems to be a bit too risky for me. That is Hertz International, ticker HTZ. We got a lot of ground to cover in the next 45 minutes or so, and it all kicks off with my main focus point about the wholesale prices surge and how that is signaling persistent price pressures. Wholesale prices rose sharply in the latest report, pointing to persistent inflation that could complicate Federal Reserve policy decisions. This unexpected uptick in producer prices suggests that inflation, well, the fight is far from over, despite the earlier optimism about cooling pricing pressures. Also, we did get news that the US economy shed 92,000 jobs last month and the month before was revised downward, so we'll touch on that. So touch on Qatar warning today that the Gulf is within days of stopping energy exports. Is oil 200 on the horizon? And should we have time at the end of the show? We did get the news a couple weeks back that the United States government is supposed to refund tariffs, but how's that actually going to play out?