MKM Partners Has $20 Target On Avis Budget Group (CAR)

MKM Partners is reiterating its $20 target and a Buy rating on Avis Budget Group, Inc.

. In a note to clients, MKM writes, " We believe that the acquisition of Dollar Thrifty by CAR should be highly accretive under a range of different scenarios. We estimate it could be $3-$6 accretive per share. However, were CAR not to be successful, we believe the company would still benefit from a consolidating industry and improving fundamentals that will enable the company to drive 200-300bps of margin improvement at least in the next 2 years on recovering travel volumes and revenues. In our view, the valuation of 5.8x, our 2011 EBITDA does not reflect the company's earnings power over the next 12-24 months." Shares of CAR gained $1.32 yesterday to close at $13.13, a gain of 11.2%.