UPDATE: Deutsche Bank Initiates Coverage on Avis Budget Group on Largely Positive Outlook

In a report published Wednesday, Deutsche Bank analyst Kelly Knybel initiated coverage on

with a Hold rating and $42.00 price target. In the report, Deutsche Bank noted, “We are initiating coverage on HTZ and CAR with Buy and Hold ratings, respectively. In general, our view on the space at present is largely constructive as we believe the recent consolidation within the industry is likely to result in a more rational environment with respect to competition as rental car operators integrate new acquisitions and focus on realizing the benefits of their new operations scale and scope. As such we believe adjusted pre-tax operating margins for the industry are poised to move higher as acquisition synergies are realized. Furthermore, we believe rental car operators are likely to see significant deleveraging over the next several years as FCF grows.” Avis Budget Group closed on Tuesday at $36.98.