NEW YORK (TheStreet) -- Shares of Avis Budget Group (CAR) - Get Report are declining 4.65% to $45.99 after Credit Suisse lowered its price target to $62 from $65 while maintaining an "outperform" rating.
Avis Budget Group is a provider of vehicle rental and car sharing services that operates Avis, Budget and Zipcar brands.
"While we still believe that stronger pricing will unfold in the industry, with the majority of 2015 fleet disposals completed, we see little near-term risk," Credit Suisse analysts said.
However, Avis is seeing healthy summer reservations in Europe, with some countries up double digits by volume, Credit Suisse added.
Separately, TheStreet Ratings team rates AVIS BUDGET GROUP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AVIS BUDGET GROUP INC (CAR) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Road & Rail industry and the overall market, AVIS BUDGET GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $503.00 million or 28.97% when compared to the same quarter last year. In addition, AVIS BUDGET GROUP INC has also modestly surpassed the industry average cash flow growth rate of 23.58%.
- 44.97% is the gross profit margin for AVIS BUDGET GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.48% is in-line with the industry average.
- AVIS BUDGET GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AVIS BUDGET GROUP INC increased its bottom line by earning $2.22 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($3.44 versus $2.22).
- CAR, with its decline in revenue, slightly underperformed the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: CAR Ratings Report