CAR - Why did Avis Budget stock soar today? J.P. Morgan issued a bull call

Avis Budget Group ( NASDAQ: CAR ) raced 16.71% higher on Monday after J.P. Morgan issued an upgrade on the car rental stock to an Overweight rating from Neutral.

Analyst Rajat Gupta and team called Avis Budget ( CAR ) an attractive investment opportunity with the company well-positioned to leverage growth in the industry. Looking ahead, tailwinds seen for the Avis Budget business, including an expectation of increased demand for rental cars as economies reopen from COVID-19-related restrictions on travel and revenue per day to remain elevated due to the limited supply of rental cars.

The call from J.P. Morgan was a bit of an outlier with the consensus Wall Street rating at Hold. Earlier in the month, Morgan Stanley warned that car rental companies Avis and Hertz remain exposed to a decline in used car pricing. which would entail higher monthly fleet/depreciation costs from current levels of near zero or even negative fleet costs/unit.

But for Monday, CAR buyers won the day. The Avis Budget ( CAR ) rally was the biggest since last March on trading volume almost double the normal activity.

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