Avis Budget: Unattractive With Soft Used Car Prices

2026-01-20 17:06:54 ET

Shares of Avis Budget ( CAR ) have been an excellent performer over the past year, gaining over 40%. Shares surged in early 2025 as the company is likely a winner of the Administration’s tariff policies. All else equal, higher auto tariffs should support used car pricing, providing a windfall for CAR similar to what we saw post-COVID. However, thus far, the benefit to used car pricing has been more modest than hoped, causing shares to reverse some of those gains and undermining the bull case. I last covered shares of Avis Budget in September , downgrading shares to a “ S ell,” which has been the right call with CAR falling by 23% since then. With shares approaching my $100-$120 fair value, now is a good time to revisit Avis Budget....

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