NEW YORK (TheStreet) -- Shares of Herc Holdings (HRI) - Get Report closed lower by 3.09% to $30.09 on heavy trading volume after KeyBanc CapitalMarkets began coverage of the stock with a "sector perform" rating.

The full-line equipment rental company is based in Bonita Springs, FL. 

"HRI possesses unique catalysts such as a new mgmt team with operational levers that could help close the margin/growth profile gap with higher quality peers as well as takeout optionality when the spin tax consequences expire," the firm wrote in an analyst note earlier today.

"Despite these favorable dynamics, because of our late-cycle non-residential/equipment rental view, we prefer to wait for more attractive valuation," KeyBanc noted.

The firm believes Herc Holdings has executed poorly this cycle and has significantly underperformed its peers.

The company lags peers on key metrics such as time and dollar utilization, according to the firm. It also broadly underperforms on financial metrics such as EBITDA margin and free-cash-flow generation.

"HRI could improve metrics by driving higher time utilization and managing its fleet mix," KeyBanc added.

Last week, Herc Holdings completed its separation from the Hertz (HTZ) car rental business and began trading as an independent, publicly traded company.

About 1.94 million of the company's shares were traded today, well above its average 30-day volume of 174,355 shares per day.

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