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MKM Partners Thinks Avis Budget Group Inc. Stock Overreacted

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Avis Budget Group Inc. (NASDAQ: CAR) stock overreacted to full year guidance on September 30, according to a report from MKM Partners.

Analyst Christopher Agnew noted that the stock is 15 percent off its highs, but reiterated his Buy rating and $80 price target.

Agnew mentioned four factors behind his rating and the overreaction:

  1. Europe caused much of the disappointment.
  2. Fleet costs are “only a couple of dollar above the high-end of previous guidance” and is reasonable given the recent record vehicle recalls.

  3. Pricing is encouraging going into 2015

  4. The market failed to understand the benefit of recent “bolt-on acquisitions” which tend to be “highly accretive.”

Avis Budget Group, Inc. traded at $51.52 midday on Wednesday.

Latest Ratings for CAR

DateFirmActionFromTo
Feb 2017Credit SuisseDowngradesOutperformNeutral
Oct 2016Goldman SachsInitiates Coverage OnNeutral
Sep 2016BarclaysMaintainsEqual-Weight

View More Analyst Ratings for CAR
View the Latest Analyst Ratings

Posted-In: Christopher Agnew MKM PartnersAnalyst Color Price Target Reiteration Analyst Ratings

 

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