Avis Budget's Neglected Turnaround Story by Michael Santoli
Summary: Avis Budget Group Inc. (NASDAQ:CAR) market share remains stable. Fleet-cost and pricing mismatches have of late dropped profit margins to 'historical trough levels.' But there's reason to hope the bottom is in as rental-car pricing is firming, and fleet costs have stabilized and should moderate in 2007. If Avis can bounce off the trough and drive margins back to, say, five-year averages, earnings would double to $2+ a share in 2008 and today's $24 would be a bargain.
Related Links: The Long Case for Avis Budget, Oscar Schafer is also bullish on Avis Budget in this week's Analyst Roundtable