Does Marcato Capital Think Avis Budget Group Inc. (CAR)’s Stock Has Bottomed Out?

The factors weighing heavily on Avis Budget Group Inc. (NASDAQ:CAR)’s stock price include a first quarter revenue miss leading to a net loss of $9 million compared to a $4 million profit in the same quarter last year, and also the entrance of other companies into the car rental space, like Ford Motor Company (NYSE:F) with its peer-to-peer car sharing “Getaround”, which has been launched in six U.S. cities.

However, there are certain catalysts that suggest that the stock price might have bottomed out and is going to recover. Avis Budget Group Inc. (NASDAQ:CAR) has embarked on a global strategic plan to add weight to its top line. In June the company signed multi-year marketing deals with JetBlue Airways Corporation and Southwest Airlines Company. Moreover, it has also recently expanded its car sales program to Minnesota and Washington, offering those states’ residents attractive deals on the purchase of Avis Car Rental and Budget Car Rental’s latest vehicles. In light of these developments, Deutsche bank upgraded the company to a ‘Buy’ rating this month, though it revised its price target down to $60 from $65, which nonetheless provides for nearly 50% upside given the stock’s recent slide.

The two largest stockholders of the company within our database hoping for such upside to be realized are Karthik Sarma‘s SRS Investment Management and Larry Robbins‘ Glenview Capital, with respective holdings of 10.0 million shares valued at $590.15 million and 7.09 million shares valued at $418.60 million.

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