Avis Near-Term View Fuzzy
Avis Budget Group (CAR - Analyst Report) is comprised of the vehicle rental operations of Avis Rent-A-Car, Budget Rent-A-Car, and Budget Truck Rental. Avis is the world's second largest general-use car rental business with over 2,200 locations in the United States, Canada, Australia, New Zealand and the Latin American/Caribbean region.
The near-term outlook for the Avis Budget Group is difficult to ascertain. The truck rental business is experiencing pricing pressure and the economy is weakening. Revenue enhancement and cost cutting initiatives have been implemented that should fuel significant financial improvements.
However, earnings visibility is limited, especially with a deteriorating economy. Also, historical valuation data is unavailable for Avis Budget Group. Management has lowered guidance for 2008 in view of rising fuel costs, weaker-than-expected enplanements, and lower commercial travel volumes. The Hold rating is maintained for Avis Budget Group.