Morgan Stanley weighs in on the earnings report turned in by Avis Budget (CAR -1.1%).
"Overall, the beat in Americas was driven by lower depreciation costs which offset a miss across the board in the international segment and see this as a slightly positive / in-line result," notes analyst Adam Jonas.
Jonas and team keep an Underweight rating on Avis amid concerns that the auto cycle is at a top with record high used car pricing, driving lower depreciation costs for the rentals. The trend is called unsustainable in the long-run. The firm's bearish view on CAR runs counter to the sell-side average rating of Outperform.
Previously: Avis Budget -6% after EBITDA miss (Aug. 6)
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