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What's in Store for Avis Budget (CAR) this Earnings Season?
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Leading global car rental company, Avis Budget Group Inc. (CAR - Free Report) is scheduled to report fourth-quarter 2016 results after market closes on Feb 15.
Last quarter, the company reported a positive surprise of 5.56%. Avis Budget has missed earnings estimates twice by a huge margin in the last four quarters, pulling down the average to a negative earnings surprise of 40.96%.
Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model does not conclusively show that Avis Budget will beat earnings this time. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.00%.
Zacks Rank: Avis Budget carries a Zacks Rank #3, which along with a 0.00% ESP, makes some earnings beat unlikely this season.
We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Influence Q4 Results
Looking at the recent series of events, it seems that Avis Budget intends to aggressively increase the number of company-operated locations in fast-growing markets. The company has been focused on expanding its Budget brand, taking its multi-brand strategy to the next level. In line with this strategy, the company is in the process of acquiring its Budget Car Rental licensees at various locations. Some of the acts of buying licensees include the 100% acquisition of its Brazilian licensee, acquiring licensee for southern Africa from Barloworld. It also includes owning the Budget licensee for Southern California and Las Vegas in the U.S., Norway, Sweden and Denmark in Scandinavia and Edmonton in Alberta, Canada. We believe these moves will facilitate Avis Budget to enhance the Budget brand loyalty through better utilization of the licensee’s established presence, which will ultimately boost its top line.
At the beginning of the quarter, the company signed a strategic partnership agreement with the world`s largest mobile transportation company Didi Chuxing. Per the deal, Avis Budget will provide over 300 million registered users of Didi Chuxing, with access to Avis Car Rental and Budget Car Rental vehicles when travelling in approximately 175 countries. This deal is likely to have a positive impact on the company’s bottom line in the to-be-reported quarter.
During the quarter, the company completed the acquisition of France Cars. This buyout will help the company position itself as the second-largest light commercial vehicle fleet operator in France, while providing a strong presence in the French local market. This acquisition will likely help the company improve its revenues in the impending quarter.
However, hurdles like unfavorable pricing and high fleet costs have been weighing upon its results and remain a threat to its ongoing performance. Moreover, the company’s significant presence in the international markets exposes it to foreign currency headwinds.
Also, a major portion of Avis Budget’s domestic car rental reservations come through third-party distribution channels. Consequently, any disruption and termination of relationships or reduction in transaction volume with such channels may have an adverse impact on the company’s financial condition as well as its operational results.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Curtiss-Wright Corporation (CW - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #3.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +85.71% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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What's in Store for Avis Budget (CAR) this Earnings Season?
Leading global car rental company, Avis Budget Group Inc. (CAR - Free Report) is scheduled to report fourth-quarter 2016 results after market closes on Feb 15.
Last quarter, the company reported a positive surprise of 5.56%. Avis Budget has missed earnings estimates twice by a huge margin in the last four quarters, pulling down the average to a negative earnings surprise of 40.96%.
Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model does not conclusively show that Avis Budget will beat earnings this time. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.00%.
Avis Budget Group, Inc. Price and EPS Surprise
Avis Budget Group, Inc. Price and EPS Surprise | Avis Budget Group, Inc. Quote
Zacks Rank: Avis Budget carries a Zacks Rank #3, which along with a 0.00% ESP, makes some earnings beat unlikely this season.
We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors to Influence Q4 Results
Looking at the recent series of events, it seems that Avis Budget intends to aggressively increase the number of company-operated locations in fast-growing markets. The company has been focused on expanding its Budget brand, taking its multi-brand strategy to the next level. In line with this strategy, the company is in the process of acquiring its Budget Car Rental licensees at various locations. Some of the acts of buying licensees include the 100% acquisition of its Brazilian licensee, acquiring licensee for southern Africa from Barloworld. It also includes owning the Budget licensee for Southern California and Las Vegas in the U.S., Norway, Sweden and Denmark in Scandinavia and Edmonton in Alberta, Canada. We believe these moves will facilitate Avis Budget to enhance the Budget brand loyalty through better utilization of the licensee’s established presence, which will ultimately boost its top line.
At the beginning of the quarter, the company signed a strategic partnership agreement with the world`s largest mobile transportation company Didi Chuxing. Per the deal, Avis Budget will provide over 300 million registered users of Didi Chuxing, with access to Avis Car Rental and Budget Car Rental vehicles when travelling in approximately 175 countries. This deal is likely to have a positive impact on the company’s bottom line in the to-be-reported quarter.
During the quarter, the company completed the acquisition of France Cars. This buyout will help the company position itself as the second-largest light commercial vehicle fleet operator in France, while providing a strong presence in the French local market. This acquisition will likely help the company improve its revenues in the impending quarter.
However, hurdles like unfavorable pricing and high fleet costs have been weighing upon its results and remain a threat to its ongoing performance. Moreover, the company’s significant presence in the international markets exposes it to foreign currency headwinds.
Also, a major portion of Avis Budget’s domestic car rental reservations come through third-party distribution channels. Consequently, any disruption and termination of relationships or reduction in transaction volume with such channels may have an adverse impact on the company’s financial condition as well as its operational results.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Century Communities, Inc. (CCS - Free Report) with an Earnings ESP of +14.93% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Curtiss-Wright Corporation (CW - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #3.
Incyte Corporation (INCY - Free Report) has an Earnings ESP of +85.71% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>