What Happened?
Shares of car rental services provider Avis (NASDAQ: CAR) fell 1.5% in the afternoon session after an analyst at Barclays lowered the price target on the stock. The analyst, Dan Levy, kept an 'Equal-Weight' rating on the shares but cut the price target by 20%, from $150 down to $120. A lower price target from an analyst can sometimes cause investors to worry about a company's future prospects, which can lead them to sell shares. This adjustment signaled a less optimistic outlook on the stock's potential value.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Avis Budget Group? Access our full analysis report here.
What Is The Market Telling Us
Avis Budget Group’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 21.1% on the news that shares of car rental companies rose as the 25% tariffs announced by President Trump on all vehicles imported into the US suggested new vehicles might be more expensive. The thinking on the Street is pretty straightforward: if new cars get more expensive, consumers might hold off on buying. That puts rental and car-sharing companies in a good spot. If buying a new car suddenly feels more expensive, people might start looking for cheaper, more flexible options. Renting for a weekend trip, or even month-to-month deals, start to make a lot more sense. So investors are getting ahead of that curve. They're betting demand for these services picks up, which means better fleet utilization, stronger revenues, and possibly fatter margins for the big rental players.
Avis Budget Group is up 68.2% since the beginning of the year, but at $135.27 per share, it is still trading 34.8% below its 52-week high of $207.55 from July 2025. Investors who bought $1,000 worth of Avis Budget Group’s shares 5 years ago would now be looking at an investment worth $4,425.
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