Barclays' Johnson on Avis Budget Group (CAR): Is Lower Depreciation Equal To Higher Profitability? With How Much Risk?
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Price: $32.03 +2.56%
Rating Summary:
1 Buy, 1 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
1 Buy, 1 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade CAR Now!
Barclays maintains an 'Equalweight' on Avis Budget Group (NASDAQ: CAR) price target raised from $14 to $20.
Analyst, Brian A. Johnson, said, "CAR looks more attractive, but depreciation creates uncertainty. Post CAR's 1Q12 print and Investor Day, the topic most discussed has been the low NA depreciation assumptions (based off high used car prices) that are driving CAR's improved guidance. We are interested in assessing the underlying profitability of CAR's rental business...While we see increased upside for CAR, uncertainty around the direction of depreciation expense limits the multiple that we apply to the stock."
The bottom line: Johnson sees several opportunities for multiple expansion, but concerns around depreciation continued to be a constant constraint. Johnson raises FY12 EPS estimate from $1.61 to $2.32 and FY13 from $1.62 to $2.32.
For an analyst ratings summary and ratings history on Avis Budget Group click here. For more ratings news on Avis Budget Group click here.
Shares of Avis Budget Group closed at $15.96 yesterday, with a 52 week range of $8.45-$19.24.
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Analyst, Brian A. Johnson, said, "CAR looks more attractive, but depreciation creates uncertainty. Post CAR's 1Q12 print and Investor Day, the topic most discussed has been the low NA depreciation assumptions (based off high used car prices) that are driving CAR's improved guidance. We are interested in assessing the underlying profitability of CAR's rental business...While we see increased upside for CAR, uncertainty around the direction of depreciation expense limits the multiple that we apply to the stock."
The bottom line: Johnson sees several opportunities for multiple expansion, but concerns around depreciation continued to be a constant constraint. Johnson raises FY12 EPS estimate from $1.61 to $2.32 and FY13 from $1.62 to $2.32.
For an analyst ratings summary and ratings history on Avis Budget Group click here. For more ratings news on Avis Budget Group click here.
Shares of Avis Budget Group closed at $15.96 yesterday, with a 52 week range of $8.45-$19.24.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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