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Avis Budget Group, Inc.

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Avis Budget continues to face hurdles like high fleet costs and stiff competition from other players in the market, mainly on grounds of pricing. The company faces the risk of losing rental volumes if it is unable to match up to industry pricing standards. In addition, volatility in market demand, foreign currency risks and dependence on third-parties remain headwinds. Avis Budget’s third-quarter margins were hurt by high fleet costs across both segments and adverse currency movements in the International segment. Though the company is progressing well with its disciplined pricing initiatives and expects these to offset the rising fleet costs, we would wait to see more pronounced results on this front before turning optimistic. However, sustained productivity growth, implementation of pricing initiatives and potential revenue-generating synergies from acquisitions bode well for future. It outperformed the industry in the last three months.

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