A prominent investment bank shaved its price target on Avis Budget Group 's (NASDAQ: CAR) stock on Wednesday morning, and the market reacted by bailing out of the shares. The vehicle rental giant closed the session more than 5% lower as a result.
Morgan Stanley (NYSE: MS) analyst Adam Jonas now has a slightly dimmer view of the prospects for Avis. The prognosticator cut his price target to $156 per share from his previous $168. Perhaps more crucially, he's maintaining his underweight (i.e., sell) recommendation.
Jonas is most concerned with pricing, which he expects will probably revert to the long-term average for rental agencies . According to his estimates, the average price Avis will be able to charge customers is $60 per day, down notably from the current figure of $73.
For further details see:Why Investors Slammed the Brakes on Avis Stock Today