Avis Budget Shares Get Upgrade: Analyst Applauds Lean Cost Base, Lower EV Exposure, Younger Fleet Mix
Portfolio Pulse from Nabaparna Bhattacharya
Goldman Sachs analyst Lizzie Dove upgraded Avis Budget Group, Inc (NASDAQ:CAR) to Neutral from Sell, raising the target price to $130 from $118, citing a lean cost base, lower EV exposure, and a younger fleet mix as advantages. Despite a potential downside to 2025 estimates, the company's pricing strength and a benign competitive environment could provide tailwinds. Avis faces $4.1 billion in vehicle debt maturing this year and $6.7 billion in 2025, with expected interest expense pressure. Avis Budget Group stock is also accessible through SPDR S&P Transportation ETF (NYSE:XTN) and Royce Quant Small-Cap Quality Value ETF (NASDAQ:SQLV).
April 04, 2024 | 6:16 pm
News sentiment analysis
Sort by:
Ascending
POSITIVE IMPACT
Avis Budget Group, Inc upgraded to Neutral by Goldman Sachs with a target price raised to $130, highlighting the company's operational strengths and potential for earnings tailwinds despite debt maturity challenges.
The upgrade by Goldman Sachs, along with the raised target price, indicates a positive outlook on Avis Budget's operational efficiency and market position. Despite the looming debt maturity, the analyst's view on the company's ability to manage its pricing strength and benefit from a less competitive environment suggests potential for stock price appreciation in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Royce Quant Small-Cap Quality Value ETF (SQLV), with exposure to Avis Budget Group, might benefit from the upgraded outlook on Avis Budget by Goldman Sachs.
SQLV, which includes Avis Budget Group in its portfolio, could see a positive impact from the company's upgraded rating and target price by Goldman Sachs. The optimistic analyst perspective on Avis Budget suggests potential upside for SQLV's performance, given its exposure to the company.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
SPDR S&P Transportation ETF (XTN), which includes Avis Budget Group in its holdings, may see indirect impact from the positive analyst outlook on Avis Budget.
Given that XTN holds Avis Budget Group shares, the ETF could experience an indirect positive impact from the upgrade and raised target price of Avis Budget by Goldman Sachs. The positive sentiment towards Avis Budget could contribute to a favorable view of the ETF's performance in the transportation sector.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60