Avis Budget Group, Inc. (CAR) has delivered better-than-expected results for the fourth quarter of 2021, as travel demand picked up pace backed by a rebounding economy. The company engages in the provision of vehicle sharing and rental services.
Adjusted earnings of $7.08 per share reflected considerable growth from a loss of $0.36 per share in the last year’s quarter. Also, the reported figure surpassed the consensus estimate of $6.15 per share.
Revenues increased 90% year-over-year to $2.57 billion, outpacing Street estimates of $2.41 billion. The upside can be attributed to solid growth across all key metrics. Compared to the prior-year quarter, rental days grew 49%, while revenue per day (excluding forex) jumped 28%, and vehicle utilization rose 68.2%.
At the end of the fourth quarter, Avis Budget’s liquidity position was about $757 million with an additional $2.6 billion of fleet funding capacity. The company has well-laddered corporate debt and no meaningful maturities until 2024.
Commenting on the fourth-quarter results, Joe Ferraro, the CEO of Avis Budget, said, “Our strong performance continued in the fourth quarter with all of our key metrics beating pre-pandemic levels in the Americas. We were able to achieve these results and deliver the best year in our Company’s history despite the emergence of Omicron.”
Stock Rating
Responding to Avis Budget’s solid performance, Deutsche Bank analyst Chris Woronka reiterated a Hold rating on the stock with a price target of $210, implying 7.9% upside potential to current levels.
Overall, the stock has a Hold consensus rating based on 1 Buy, 4 Holds, and 1 Sell. The average Avis Budget price target of $235.20 implies 20.8% upside potential to current levels. Also, shares have soared 399.4% over the past year.
News Sentiment
News Sentiment for Avis Budget is Neutral based on 20 articles over the past seven days. All the articles have Bullish sentiment, compared to a sector average of 63%, and none have Bearish Sentiment, compared to a sector average of 37%.
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