Avis Budget shares rose Thursday, following a rating boost from Bank of America.
Bank of America upgraded rating on the car rental company’s shares to buy from neutral.
“Many of the macro factors driving ‘over-earning’ by the company in 2021 will likely persist well into 2022,” BofA analysts wrote in a commentary. The factors include limited incoming vehicle supply and tight average fleet, higher revenue per day from the ongoing supply/demand imbalance and moderated per unit fleet cost from elevated used vehicle pricing.
“Combined with ongoing execution by Avis, this should result in upward revisions to 2022 and beyond estimates that do not appear appreciated by the stock,” the analysts said.
Bank of America has a target price of $125 on Avis shares, up from $90.