Avis Budget initiated with a Sell at Goldman Sachs

Goldman Sachs initiated coverage of Avis Budget (CAR) with a Sell rating and $164 price target. Following two years of tight supply leading to record high rental rates and surging residual values, EBITDA has started to normalize in the rental car space, the analyst tells investors in a research note. The firm believes consensus estimates of pricing in 2025 remaining 30% over 2019 levels are too high, and that greater focus on company-specific growth is more warranted later cycle. While Avis Budget has been executing better than Hertz (HTZ) year-to-date, it has a more limited catalyst path from here, contends Goldman, which expects further downside to consensus estimates in 2025. The market is over-estimating the company’s’ pricing power at 30% versus 2019 in 2025, the firm says. As such, it believes the stock’s risk/reward skews negatively.