By Emily Dattilo
Shares of Avis Budget Group were trading sharply higher as investors shrugged off disappointing quarterly results.
Near midday Friday, the stock was up 19% to $98.55, a positive move in a rough year for the car-rental company. Through Thursday's close, shares were down 53% this year, according to Dow Jones Market Data.
For its third quarter, the company reported diluted earnings of $6.65 per share, compared with the consensus call for $8.26 among analysts tracked by FactSet. Revenue of $3.48 billion was below the consensus estimate of $3.53 billion.
"We maintained a strong focus on pricing throughout the quarter, prioritizing higher margin business which allowed us to keep our revenue per day stable with the Americas nearly flat," said CEO Joe Ferraro in the earnings release.
"Our U.S. model year 2025 buy is well under way and expected to drive significant savings as these vehicles are rotated into our fleet," he added. "Lastly, the holidays look strong, and we believe we are well positioned to capitalize on this demand."
Deutsche Bank analysts led by Chris Woronka, who rate shares at Buy with a price target of $145, weighed in on the quarter.
"We believe management is positioning for a return to bottom-line growth in 2025, and we note that the company bought back $25 million of stock in 3Q, plus $18 million in October, and we believe the pace of buybacks is likely to accelerate from here based on our projections related to FCF [free cash flow] generation in 2025," the analysts wrote.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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(END) Dow Jones Newswires
November 01, 2024 13:32 ET (17:32 GMT)
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