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Earnings Estimates Rising for Avis Budget (CAR): Will It Gain?

Avis Budget (CAR) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

Investors might want to bet on Avis Budget Group (CAR), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

- Zacks

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this car rental company, 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

The company is expected to earn $5.93 per share for the current quarter, which represents a year-over-year change of +1747.22%.

Over the last 30 days, three estimates have moved higher for Avis Budget compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 113.22%.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $19.91 per share represents a change of +420.61% from the year-ago number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, four estimates have moved up for Avis Budget versus no negative revisions. This has pushed the consensus estimate 40.55% higher.

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

Investors have been betting on Avis Budget because of its solid estimate revisions, as evident from the stock's 88.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.



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Avis Budget Group, Inc. (CAR): Free Stock Analysis Report

 

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