GOLDMAN’S DOUBLE UPGRADE FOR AVIS MAY PROVE AN ENTRY OPPORTUNITY?
SII - AUTO -- FLEET RENTALS
- Investors are reacting as they size up Goldman Sachs' two-notch upgrade on the car rental stock.
- GS analyst David Tamberrino
- "We believe valuation looks attractive for mean reversion — currently trading at 6.2x our 2019E EBITDA estimate vs. a historical trough multiple of 5.9x and long-term average 8.4x — as most of the headwinds the industry (and the company) is facing appear priced in,"
- Hertz Global is also on the move after the Avis upgrade.
- Of course, huge swings in Hertz are nothing new amid a long vs short battle that's been playing out for more than a year.
- Short interest on Hertz was reported at 25% on January 25.
- Previously: Avis Budget +6% after two-notch upgrade from Goldman Sachs (Feb. 11)
Overhead resistance that cannot be broken (see chart below) may present a "SHORTING" opportunity
Timing to exit existing shorts and take gains.