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In a turbulent market environment, Avis Budget Group Inc. (NASDAQ:CAR) stock has reached a 52-week low, touching down at $65.66. The car rental giant, known for its fleet of vehicles serving travelers and businesses alike, has faced significant headwinds over the past year, with the stock declining nearly 36%. With a beta of 2.37, the company’s shares have shown particularly high volatility compared to the broader market. According to InvestingPro analysis, the stock appears undervalued at current levels. This downturn marks a challenging period for the company as it navigates through a landscape marked by changing consumer behavior and economic uncertainty. With a market capitalization of $2.35 billion and current ratio of 0.73, the company faces some near-term liquidity challenges. However, analysts remain optimistic, projecting a return to profitability this year. Investors and analysts are closely monitoring Avis Budget’s strategic moves as it attempts to steer back towards growth and profitability in the face of these persistent challenges. For deeper insights into CAR’s financial health and growth prospects, InvestingPro subscribers have access to over 10 additional exclusive ProTips and comprehensive analysis.
In other recent news, Avis Budget Group reported a significant earnings miss for the fourth quarter of 2024, with earnings per share at -$55.66, well below the forecast of -$1.02. Revenue for the quarter also fell short of expectations, coming in at $2.71 billion against a forecast of $2.73 billion. This financial performance was impacted by a substantial non-cash asset impairment charge of $2.5 billion, linked to an accelerated fleet rotation strategy. Moody’s Ratings has affirmed Avis Budget’s ratings but shifted the outlook to negative, citing expectations of a prolonged recovery for the company’s margins and balance sheet deleveraging. Similarly, S&P Global Ratings revised Avis Budget’s outlook to negative from stable and affirmed its ’BB’ rating, noting higher vehicle costs as a strain on financial performance. JPMorgan adjusted its price target for Avis Budget Group shares, reducing it to $135 from $150, while maintaining an Overweight rating. The firm highlighted a decrease in the first quarter EBITDA estimate, following the company’s guidance predicting a $100 million loss for the quarter. Despite the challenges, Avis anticipates a rebound in 2025, projecting an adjusted EBITDA of at least $1 billion.
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