Avis Budget’s Strong Market Position and Growth Prospects Justify Buy Rating

Bank of America Securities analyst John Babcock maintained a Buy rating on Avis Budget (CAR – Research Report) yesterday and set a price target of $120.00.

John Babcock has given his Buy rating due to a combination of factors that highlight Avis Budget’s strong market position and future growth potential. The company is on track to achieve approximately $1 billion in adjusted EBITDA by 2025, with expectations for even higher earnings in 2026. Avis Budget is well-positioned to capture market share from competitors like Hertz, supported by favorable demand trends and a strategic reduction in fleet size, which is expected to enhance vehicle utilization rates.
Additionally, improvements in the used vehicle market suggest potential upside to the company’s depreciation per unit guidance. Avis Budget’s recent fleet refresh, which includes a higher mix of CUVs and SUVs, positions it to outperform peers in terms of EBITDA per vehicle. The company is also focusing on reducing leverage, aiming to pay down significant debt by year-end, which reflects a balanced approach to capital allocation. These strategic initiatives and market conditions underpin Babcock’s confidence in maintaining a Buy rating for Avis Budget.

According to TipRanks, Babcock is a 4-star analyst with an average return of 9.5% and a 52.17% success rate. Babcock covers the Consumer Cyclical sector, focusing on stocks such as Visteon, Luminar Technologies, and Mobileye Global, Inc. Class A.

In another report released on May 19, Morgan Stanley also maintained a Buy rating on the stock with a $115.00 price target.