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Avis Budget stock bounces, as erasing all of the November 'short squeeze' surge triggers upgrade at JPMorgan

MarketWatch
MarketWatch
 2022-01-26
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By Marketwatch
MARKET PULSE

Shares of Avis Budget Group Inc. (car) charged up 6.7% in afternoon trading Wednesday, enough to pace the Dow Jones Transportation Average's (djt) gainers, after J.P. Morgan analyst Ryan Brinkman backed away from bearish call after the selloff to a three-month low. The stock closed Tuesday at $169.52, at the lowest price since Oct. 27, meaning it had erased more than everything it gained during the "meme"-like, short-squeeze-induced 108.3% rocket ride on Nov. 2 after the car rental company reported record third-quarter earnings . On Wednesday, J.P. Morgan's Brinkman raised his rating to neutral, after double downgrading it on Nov. 3 to underweight from overweight. "While we expected some normalization lower in CAR [Avis] shares on unwind of the technical reasons underpinning the short squeeze (our prior price target of $225 today moves to $205), from our conversations, CAR shares have come under fire for their leverage to travel amid the COVID-19 omicron variant surge , although experts predict this wave is now or may soon recede, and the variant seems so far to cause more mild symptoms and to have had less of an effect on bookings, etc., than earlier variants," Brinkman wrote in a note to clients. The stock has dropped 12.8% year to date, while the Dow transports has lost 6.9% and the Dow Jones Industrial Average (djia) has slipped 4.8%.

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