Avis Budget Group, Inc.
) achieved a new 52-week high of $63.38 yesterday before
closing trade at $63.03. The stock has been gaining momentum since
it reported robust financial results for second-quarter 2014 on Aug
4. Notably, this vehicle rental company amassed a return of 8.4%
since the second quarter results and 55.8% in the year-to-date
The company posted better-than-expected second quarter results
mainly benefiting from strong volume growth and improved pricing
for both leisure and commercial travels in North America, coupled
with the company's focus on speeding up growth in its most
Second-quarter 2014 adjusted earnings per share of 68 cents grew
36% from the prior-year earnings and surpassed the Zacks Consensus
Estimate of 63 cents. Avis Budget's net revenue increased 10% year
over year to $2,194 million in the quarter and outdid the Zacks
Consensus Estimate of $2,140 million. Revenue growth was primarily
driven by an 8% rise in rental days and improved pricing in North
Other than this, the recent momentum in the stock was mainly
driven by a rebound in leisure and business travels owing to
recovery in the U.S. economy and increased spending by individuals.
Furthermore, while the company's growth is mainly coming from an
uptick in travel demand, the integration of its Zipcar and Payless
Car Rental businesses are also progressing well.
Apart from recent positive industry trends, we believe that the
company's record of beating quarterly earnings expectations and
sustained focus on increasing its global footprint make the stock
an attractive option for investors. With respect to earnings
surprises, this Zacks Rank #1 (Strong Buy) company has posted
positive surprises in 6 of the last 7 quarters with an average beat
of 34.8%. The company's long-term EPS growth rate is 31.4%, over
twofold from the peer group average of 15.5%.
This leading car rental company currently trades at a forward
P/E of 21.1x, in line with its peer group average. Its last traded
price is 4.5% above the Zacks Consensus average analyst price
target of $60.33. Average volume of shares traded over the last 3
months stands at approximately 1,367.2K.
Apart from Avis Budget, Newell Rubbermaid Inc. (
), Archer Daniels Midland Company (
), and Deckers Outdoor Corp. (
) also hit 52-week highs of $33.64, $50.00 and $95.00,
respectively, on Aug 11, 2014.
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