Avis Budget has been “left behind, without cause,” opening up a buying opportunity for investors, according to Deutsche Bank. Analyst Chris Woronka upgraded shares to buy from hold. He also raised his price target to $263 from $239, implying 61% upside potential from Tuesday’s close. “While our call is primarily valuation-centric, we also see a potential catalyst in the form of a likely return to share repurchases in the back half of the year,” Woronka wrote in a Wednesday note. “CAR has meaningfully underperformed comparable travel and leisure sub-sectors on a YTD basis (to the tune of 2,400bps on average) and we believe the stock could be appealing to investors seeking to buy reasonably priced laggards as the S & P 500 sits near a 9-month high,” he continued. Shares are flat in 2023. Over the past 12 months, they are down 14.2%. CAR YTD mountain CAR year to date “It is no secret that CAR’s earnings have benefited from gains on the resale of its vehicles for some eight quarters now, or that the company’s pricing metric (‘RPD’) remains some 36% ahead of comparable 2019 levels on a TTM basis. But we believe too much pessimism is being baked into the stock on both accounts,” Woronka said Woronka thinks Avis’ European segment will top expectations in the near term as the region continues to catch up in its post-Covid recovery. “Buy the laggard,” Woronka added. —CNBC’s Michael Bloom contributed to this report.
