Chase the Rebound in Avis (CAR) Stock Amid Trump's Auto Tariff Boost?

Core Viewpoint - Avis Budget Group (CAR) shares have increased over 20% in the past week due to President Trump's 25% tariffs on imported vehicles, which are expected to enhance the fleet value for Avis [1] - The positive investor sentiment is driven by the implied pricing leverage Avis will have for its rental car services [1] Group 1: Stock Performance - Avis stock has rebounded from its 52-week low of $54 in March but remains 43$130 from last May [2] - The company has missed bottom-line expectations in three of its last four quarterly reports, although it recently surpassed Q4 EPS estimates with an adjusted loss of -$0.23 compared to estimates of -$0.96 [3] Group 2: Earnings Outlook - Annual earnings for Avis are projected to rebound to $8.84 per share this year, up from$3.74 in fiscal 2024, following a one-time non-cash impairment of $2.3 billion last year [4] - EPS is expected to increase by 63$14.47, although estimates for FY25 and FY26 have declined over the last 60 days [5][6] Group 3: Sales Projections - Total sales for Avis are expected to rise by 1% in FY25 and by another 2% in FY26, reaching $12.2 billion [7] Group 4: Valuation Comparison - Avis currently trades at 8.7X forward earnings, significantly lower than the Zacks Transportation-Services Industry average of 16.5X [10] - Avis trades at less than 1X sales, which aligns with the industry average, despite Hertz being unprofitable and not suitable for P/E comparison [10] Group 5: Strategic Considerations - Avis stock is considered attractive for long-term investors under$100 per share, but there may be better buying opportunities ahead [12] - A decline in EPS estimates could lead to a sell rating, while an increase in EPS revisions could result in a buy rating if the tariffs positively impact operations [13]