A Banc of America analyst recently downgraded car rental operator Hertz Global Holdings Inc. to "Neutral" from "Buy", citing a dip in used vehicle resale values.

Analyst Jairam Nathan also cut his 2008 earnings forecast to $1.40 per share from $1.60 per share, and lowered his price target to $20 from $27.

In November, used vehicle prices fell 1 percent for the second month in a row. Hertz has a high exposure to these prices, as it is affected more by depreciation costs than cost reductions or pricing, he said.

For every 1 percent decline in American used car prices, Hertz's earnings could fall 7 cents per share, Nathan said, noting that he expects used car prices to dip 1 percent a year for the next two years. That estimate could be conservative, as used car prices have fallen 5 percent to 10 percent in past recessions, he said.

Shares closed Tuesday at $16.46.