Skip to main content

Market Overview

3 Reasons Why Avis Budget Shares Could Go Higher

3 Reasons Why Avis Budget Shares Could Go Higher

Shares of car rental company Avis Budget Group Inc. (NASDAQ: CAR) are up more than six-fold since bottoming at $6.35 last March and three catalysts could help lift shares even higher, according to BofA Securities.

The Avis Budget Analyst: Aileen Smith initiated coverage of Avis Budget Group's stock with a Buy rating and $50 price target.

The Avis Budget Thesis: Avis Budget operates multiple car and truck rental brands and also has exposure to car-sharing through Zipcar, Smith wrote in the note. The company is considered the "only investible" name in the car rental space for three reasons.

1. 2021 could represent the early days of a multi-year recovery after the market hit a trough in 2020 amid the COVID-19 pandemic. Specifically, year-over-year revenue was down 68% in the second quarter of 2020 and improved to down 44% in the third quarter and down 35% in the fourth quarter. For the full-year 2021, revenue is expected to rise 21% year-over-year and grow at a compounded annual growth rate of 10% through 2025.

Related Link: Benzinga's Top Ratings Upgrades, Downgrades For January 25, 2021

2. Management eliminated over $2.5 billion in costs throughout 2020 and generated a positive EBITDA/FCF by the third quarter. Cost-saving measures could translate to 8% adjusted EBITDA margins in 2021 and improve to the low-double digits through 2025.

3. Avis Budget is well-positioned to gain market share from Hertz that is the weakest player in the space and undergoing a bankruptcy process. Avis Budget could also gain share as consumers decide against flying or traveling by trains.

CAR Price Action: Shares of Avis Budget Group closed Monday at $41.02.

(Photo: Avis)

Latest Ratings for CAR

Feb 2021Morgan StanleyMaintainsOverweight
Jan 2021B of A SecuritiesInitiates Coverage OnBuy
Jan 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for CAR
View the Latest Analyst Ratings


Related Articles (CAR)

View Comments and Join the Discussion!

Posted-In: Aileen Smith Avis BudgetAnalyst Color Long Ideas Price Target Initiation Analyst Ratings Trading Ideas

Latest Ratings

ALTRGoldman SachsUpgrades65.0
BMOB of A SecuritiesUpgrades
PRTKJefferiesInitiates Coverage On15.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at