Will Avis Budget (CAR) Stock Rally After Earnings?

What's Happening With CAR View more about CAR >

Avis Budget Group (CAR) reports fourth-quarter earnings February 20. The car rental company will report after the market close with the consensus calling for earnings of $0.31 per share on revenue of $2.06 billion. During the same period last year the company earned $0.45 on revenue of $2 billion.

Technical Analysis

CAR was recently trading at $28.58 down $22.30 from its 12-month high and $6.95 above its 12-month low. InvestorsObserver’s Stock Score Report gives CAR a 32 long-term technical score and a 53 short-term technical score. The stock has recent support above $24 and recent resistance below $30. Of the 3 analysts who cover the stock 2 rate it Strong Buy, 0 rate it Buy, 0 rate it Hold, 0 rate it Sell, and 1 rate it Strong Sell, CAR gets a score of 38 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

Avis is coming off a disastrous 2018. The stock hit a bottom at the end of December, and has since rebounded 32 percent, but it remains in the lower end of its 52-week range headed into the upcoming quarterly report. Last quarter the company missed its earnings estimate wildly to the downside along with a small revenue miss. The market was quick to drive the stock lower and will react the same if the company is not able to deliver better results for its most recent quarter.

The consensus is calling for a year over year earnings drop of 31 percent. The drop has already been priced into the stock and should not impact shares as long as the company is able to hit the $0.31 per share estimate. The lower earnings will be partially offset by a small year over year rise in revenue as long as Avis is able to hit its revenue estimate.

Despite the earnings drop this quarter, the company has shown good earnings growth in recent years with profits up 21 percent per annum over the last five years and analysts remain upbeat on the future with a forecast average annual earnings growth rate of 15 percent. The stock trades at just over 6 times earnings so the valuation should prevent a huge selloff even if the results do turn out weaker than expected but given the recent volatility in the stock current shareholders should have a solid exit strategy in place just in case a miss does occur. Analysts have a bullish average price target of $40.80 on the stock.

About Avis Budget Group Inc.

Avis Budget Group Inc is a provider of automotive vehicle rental and car sharing services. Its brands include Avis, Budget, and Zipcar. Avis is targeted to serve the premium commercial and leisure segments of the travel industry, while Budget is focused on value-conscious customers. The company operates its own network of rental locations and licenses its brands to franchisees. Zipcar is a car-sharing service that allows members to use the company-owned Zipcar fleet at an hourly rate. The company's largest region by revenue is the Americas.

  • Last Price:
  • Previous Close:
  • Change:
    $0.33 (0.94%)
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  • Market Capitalization:
    $2.7 B
  • Day's Range:
    $35.17 - $35.92
  • Dividend Yield:
  • 52-week Range:
    $39 - $21.63
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  • Sector:
  • Industry:
    Rental & Leasing Services
  • Analyst Average Recommendation:
    Moderate Buy

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