Shares of Hertz Global (HTZ) are plunging after the car rental giant reported worse than expected quarterly results, slashed its full year guidance and saw its stock downgraded to Neutral-equivalent ratings by Deutsche Bank and Northcoast. Following Hertz's earnings release, shares of rental car peer Avis Budget (CAR) have also dropped amid concerns over the sector's outlook.

RESULTS: Last night, Hertz reported third quarter adjusted earnings per share of $1.58 and revenue of $2.5B, below consensus expectations of $2.75 and $2.6B, respectively. The company also lowered its 2016 adjusted earnings per share view to 51c-88c, from the previous $2.75-$3.50. Additionally, Hertz said it now sees 2016 U.S. car rental revenues to be down 2%-3%.

ANALYSTS MOVE TO THE SIDELINES: In a post-earnings note, Deutsche Bank analyst Chris Woronka downgraded Hertz to Hold from Buy to reflect a "newfound lack of confidence" in earnings visibility and the company's ability to provide achievable guidance. The analyst told investors that there are more questions than answers at this point, adding it is now "extraordinarily difficult" for investors to have conviction in continued progress on the turnaround story given these latest disappointing and surprising developments. He also slashed his price target on the shares to $24 from $59. His peer at Northcoast also downgraded Hertz to Neutral from Buy this morning, citing third quarter results and the revised outlook of the business. Analyst John Healy told investors in a research note of his own that the worse than expected quarterly results reflect the pressures of strategic restructuring efforts that continue to take time to progress. While he acknowledged Hertz's brand value, Healy noted that he is surprised at how long the path to recovery has taken.

ANOTHER TO WATCH: Hertz's results dragged the shares of its rental peer Avis Budget this morning into negative territory as well, with the stock dropping almost 16%. This comes after the later reported better than expected third quarter results on Wednesday, but with its full year earnings per share guidance coming in at $2.93, which was below the consensus forecast of $3.01.

PRICE ACTION: In morning trading, shares of Hertz have plunged about 50% to $17.84.