Analyst Lizzie Dove of Goldman Sachs reiterated a Sell rating on Avis Budget (CAR – Research Report), with a price target of $118.00.
Lizzie Dove has given her Sell rating due to a combination of concerning financial indicators and market dynamics affecting Avis Budget Group. A significant factor in her analysis is the higher-than-anticipated costs of vehicle depreciation projected for 2024, which is expected to be about $325 per vehicle, exceeding the consensus estimates. Additionally, Avis is facing steeper year-over-year declines in pricing than the market had originally forecasted, with a predicted 4% drop in 2024, which further contributes to the bearish outlook for the company’s financial performance.
Furthermore, the company’s over-fleeting issue, which may result in selling vehicles at a loss, is expected to have a pronounced impact in the first quarter, compelling Dove to lower EBITDA estimates for 2024 and 2025 by 15%. This situation is likely to lead to a suspension of share buybacks for at least the first half of the year. The culmination of these factors, alongside a faster-than-expected return to margin levels closer to those seen in 2019, underpins Dove’s reinforcement of the Sell rating and the reduction of the price target from $164 to $118, indicating a 9% downside potential.
According to TipRanks, Dove is a 2-star analyst with an average return of 0.0% and a 28.57% success rate.
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Avis Budget (CAR) Company Description:
Avis Budget Group, Inc. engages in the provision of vehicle sharing and rental services. It operates through the Americas and International segments. The Americas segment licenses the company’s brands to third parties for vehicle rentals and and ancillary products and services in North America, South America, Central America, and the Caribbean. The International segment leases out vehicles in Europe, the Middle East, Africa, Asia, and Australasia. The company was founded by Warren E. Avis in 1946 and is headquartered in Parsippany, NJ.
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