Singapore markets open in 2 hours 43 minutes
  • Straits Times Index

    3,130.24
    +15.16 (+0.49%)
     
  • S&P 500

    3,585.62
    -54.85 (-1.51%)
     
  • Dow

    28,725.51
    -500.09 (-1.71%)
     
  • Nasdaq

    10,575.62
    -161.88 (-1.51%)
     
  • BTC-USD

    19,203.55
    -91.07 (-0.47%)
     
  • CMC Crypto 200

    443.49
    +0.06 (+0.01%)
     
  • FTSE 100

    6,893.81
    +12.22 (+0.18%)
     
  • Gold

    1,672.20
    +0.20 (+0.01%)
     
  • Crude Oil

    81.82
    +2.33 (+2.93%)
     
  • 10-Yr Bond

    3.8040
    +0.0570 (+1.52%)
     
  • Nikkei

    25,937.21
    -484.89 (-1.84%)
     
  • Hang Seng

    17,222.83
    +56.93 (+0.33%)
     
  • FTSE Bursa Malaysia

    1,394.63
    -2.87 (-0.21%)
     
  • Jakarta Composite Index

    7,040.80
    +4.60 (+0.07%)
     
  • PSE Index

    5,741.07
    -193.18 (-3.26%)
     

Will Avis Budget (CAR) Gain on Rising Earnings Estimates?

·2-min read

Avis Budget Group (CAR) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this car rental company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Avis Budget, as there has been strong agreement among the covering analysts in raising estimates.

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $15.05 per share, which is a change of +40.13% from the year-ago reported number.

Over the last 30 days, the Zacks Consensus Estimate for Avis Budget has increased 22.22% because two estimates have moved higher while one has gone lower.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $46.86 per share, representing a year-over-year change of +108.36%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Avis Budget. Over the past month, four estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 19.25%.

Favorable Zacks Rank

The promising estimate revisions have helped Avis Budget earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Avis Budget shares have added 17.5% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.