Avis Budget Group, Inc.
) entered into a multi-year deal with Costco Travel. As per the
deal, more than 45 million
Costco Wholesale Corporation
) members across the U.S. will be provided with savings on
vehicle rentals and supplementary products from Avis Car Rental
and Budget Car Rental.
Further, the Costco members will continue to enjoy the benefits
of booking Avis and Budget reservations through Costco's
toll-free member phone number and authorized website. Moreover,
Costco's 450 stores in the U.S. will showcase the car rental
brands across email marketing campaigns and in-store signage.
The above-mentioned partnership will expectedly benefit both Avis
Budget and Costco Travel. For Avis Budget, the tie-up will
facilitate the increase of its customer base and aid in top-line
growth as well. For Costco, the deal will help in providing its
members high quality services and enhanced savings through Avis
We see strong U.S. demand for Avis Budget as travel volumes
continue to do well. A rise in traveling for both leisure and
business purposes and a projection of sustainability of this
trend lead us to expect this partnership, along with the earlier
acquisition of Avis Europe, to enhance Avis Budget's operational
foothold in the global market.
Avis Budget is a leading provider of vehicle rental services.
The company is seeking to boost revenues and hence, aggressively
expanding its operations through acquisitions and joint ventures.
Some of the company's recent acquisitions include Payless Car
Rental (in Jul 2013) and Zipcar Inc. (in Mar 2013).
However, the prevalent sluggish economic scenario in both Europe
and Australia, along with rising fleet costs remains a drag on
the Avis Budget's bottom-line performance. With the company
lowering it outlook for fiscal 2013, it now carries a Zacks Rank
#5 (Strong Sell). Hence, we would prefer to avoid Avis Budget
until there are signs of improvement.
Meanwhile, other stocks that are worth a look include
). Both carry a Zacks Rank #1 (Strong Buy).
AVIS BUDGET GRP (CAR): Free Stock Analysis
CARDTRONICS INC (CATM): Free Stock Analysis
COSTCO WHOLE CP (COST): Free Stock Analysis
COMSCORE INC (SCOR): Free Stock Analysis
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