AVIS BUDGET GROUP (CAR), mcap=$12.3bn, price $256 vs. $268

Short Pitch: Car rental business is over-earning over-earning due to the auto OEM production issues impact on used car prices and rental vehicle supply. Competition is intense and historical economics has been uninspiring.

Valuation: Assuming Avis earns excess profits in 2022 and 2023 and thereafter normalized EBITDA is 335% high than pre-COVID average, leads to a $152/share price target at a 14x normalized cashflow multiple.

Exp. gain: 40%-50%

Full CAR write-up (free guest account required):


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