![]() (AAL) has been forced to cancel more than 2,000 flights since Friday due to weather issues and labor shortages. More than 20% of Avis Budget’s shares are being held short, meaning that traders are borrowing them and immediately selling them in hopes to buy the shares back at a lower price and profit on the margin when they return the stock to the lender.ĭisruptions in air travel could slow down rental car demand too. Many investors are betting the stock will go down. Win McNamee/Getty ImagesĬar prices are about to soar again. Ida made landfall August 29 as a Category 4 storm near Grand Isle, southwest of New Orleans, causing widespread power outages, flooding and massive damage. Homes destroyed in the wake of Hurricane Ida are shown in addition to a submerged automobile Septemin Grand Isle, Louisiana. The consensus price target on the stock is about $128, nearly 30% below current levels. Still, there are concerns on Wall Street about whether Avis Budget’s stock has come too far too fast.Īccording to Refinitiv, only three analysts recommend the stock as a buy while four have it as a hold and one rates it a sell. But I do think that there is some tailwinds on that.” “How long that goes? I’m not totally sure. ![]() “I still think the used car market has legs,” he said. But he didn’t rule out more sales in the future. ![]() Used car prices have skyrocketed during the past two years due to a global semiconductor shortage that has hampered production of new vehicles.įerraro noted in August that Avis Budget did not sell any of its fleet in the second quarter because it needed the vehicles to meet demand for rental cars. “Since the pandemic began, we’ve been consistent with our message that Avis Budget Group would come out of this disruption a transformed company,” Ferraro said, “and our focus on cost discipline and operational efficiencies would position us to take maximum advantage of a rebound in travel.”Īvis Budget also has a potential ace up its sleeve that could lead to even bigger gains in sales and earnings: a fleet of used cars it can sell to dealers or consumers. Uber and Hertz CEOs discuss Tesla partnership Surging demand for travel and rental carsĪvis Budget CEO Joe Ferraro said during the second quarter earnings call with analysts in August that the 75-year-old company posted record sales and profit margins. Shares rose about 6% in after hours trading Monday. The return of leisure and business travel this year as more customers were vaccinated for Covid-19 have helped Avis Budget rebound from a dismal 2020. Sales nearly doubled from a year ago and net income skyrocketed 1,400 percent, easily topping forecasts and hitting a new record. Needless to say, expectations were high - and Avis Budget The company reported its third quarter results after the closing bell Monday. (CAR) have surged more than 110% since July and are up almost 380% so far in 2021. Still, that’s nothing compared to its rival’s stock. Hertz stock, which currently is listed on Nasdaq’s bulletin board and hopes to return to the regular Nasdaq through an initial public offering, is up almost 30% since the company emerged from bankruptcy earlier this year and began trading again in July. But rival rental car company Avis Budget is doing even better. Hertz has made a lot of headlines lately thanks to its deals with Tesla and Uber.
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