By George Glover
Shares in Avis Budget Group have been on a tear lately -- and the car rental company's returns appear to have little to do with earnings, the oil-price shock, or recent airport staffing concerns.
Avis stock, which trades under the ticker CAR, was down 7.6% on Tuesday.
But shares rose 24% on Monday, with the stock rising 264% in the past month. The S&P 500 rose 2.8% over the same period, despite fears that the war in the Middle East will push up inflation.
The triple-digit gains are a surprise, considering the fourth-quarter earnings Avis announced on Feb. 19. For the period, the company posted a loss of $4.60 a share, much wider than analysts were expecting, as revenue slipped 2% from a year ago to $2.66 billion.
Car rental stocks got a boost in late March as spring breakers opted to drive to their destinations in a bid to dodge the long airport security lines caused by a shortage of Transportation Security Administration officers amid a partial government shutdown.
Shares of rival Hertz have gained 56% over the past month, though, suggesting the temporary spike in rental demand isn't the only factor that has triggered a surge in Avis shares.
Avis may be experiencing the ongoing effects of a short squeeze -- when a stock suddenly jumps, forcing short-sellers to buy back shares in cover their losing bets. Those purchases in turn drive the stock's price even higher.
MarketWatch reported earlier this month that Deutsche Bank analyst Chris Woronka said there could be more upside from the short squeeze, which he traced to hedge fund Pentwater Capital Management's recent trades.
Pentwater did not immediately respond to Barron's request for comment.
Short interest represented more than 26% of Avis's public float as of Tuesday.
Avis has experienced short squeezes before: In November 2021, the stock surged 110% in a single day, following solid-enough earnings that suggested rental demand was rebounding after the Covid-19 pandemic.
Write to George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 14, 2026 12:00 ET (16:00 GMT)
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