Investing.com -- Avis Budget Group (NASDAQ: CAR) shares fell 9% Thursday, extending losses after a 38% decline the previous day, as a short squeeze eased and JPMorgan downgraded the stock.

JPMorgan analyst Ryan Brinkman downgraded Avis Budget from Neutral to Underweight with a price target of $165, up from $123. The downgrade came despite the analyst raising the price target by 34% to account for potential capital market opportunities.

"We view the recent extraordinary ’short-squeeze’ driven rally in Avis Budget (CAR) shares as a potentially significant opportunity for management to create lasting value via opportunistic capital market transactions, but are nevertheless downgrading the stock to Underweight from Neutral, given our sense that the shares have risen far above the level we feel can be justified by even the most optimistic view of underlying earnings fundamentals," Brinkman commented.

Despite the sharp drop yesterday, Avis Budget shares remain up 340% over the past 30 days, driven by the short squeeze that preceded the recent selloff.