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Investing.com – avis budget (NASDAQ:) The group has struggled with rising costs, which led Gimme Credit to lower its credit stance on the rental car giant this year.
In a memo dated February 21, Gimme Credit, a leading independent corporate bond research company, lowered its credit stance from “improving” to “deteriorating” and lowered its credit score from +1 to -1.
“Avis Budget Group is returning to more normal seasonal demand after the COVID-19-related travel binge. “This trend is likely to continue until at least the end of 2024,” the group said in a note.
To ease the situation, Avis is downsizing its fleet to keep it sized to meet demand, analysts said.
“Rental demand remains strong, but we are concerned about rising costs per vehicle and declining residual values of used cars,” Gimme Credit said.
Avis reported mixed fourth-quarter results earlier this month, including higher profits, but sales were lower than expected despite improved rental demand.
At the end of the quarter, the company's liquidity position exceeded $800 million, with an additional approximately $900 million in fleet financing capacity.
As of 10:15 a.m. ET (3:15 p.m. Japan time), the company's stock was trading 0.1% higher at $106.37, but has fallen more than 40% year-to-date and more than 50% in the last year. did.
