After Deutsche Bank downgraded the rating, Avis Budget's stock price fell

LootboxPhobia · 2026-04-06T14:13:04+00:00

Avis Budget Group stock fell 2.8% on Monday after Deutsche Bank downgraded its rating from Buy to Hold, citing valuation concerns despite upside potential. The analyst maintained a $128 target price, emphasizing that the downgrade was based on fundamental factors and expecting short-term trading dynamics to influence the stock price.

LootboxPhobia

2026-04-06 14:13:04

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Investing.com – Avis Budget Group (Nasdaq stock code: CAR) shares fell 2.8% on Monday. Earlier, Deutsche Bank downgraded the stock rating from Buy to Hold, citing valuation concerns despite further upside potential.

Deutsche Bank analyst Chris Woronka maintained a $128 price target while downgrading the rating, saying the downgrade was “purely based on fundamental factors.” The analyst said it is difficult to justify the current share price using traditional indicators and a 12-month time frame.

Woronka emphasized that the downgrade is not a sell recommendation and pointed out that there is a substantial risk of further significant upside in the stock price due to a potential short-squeeze situation. The analyst traced recent trading activity back to the Form 3 and Form 4 filings submitted by Pentwater Capital Management over the past two months, particularly a filing dated March 20. Since the close that day, the CAR share price has surged 91%, while the S&P 500 has risen only 1%.

The analyst commented: “We want to be very clear that our downgrade is purely based on fundamental factors. As we explain later in this note, we believe the stock is very likely to rise significantly from current levels for technical reasons. However, because we find it difficult to justify the current share price using traditional indicators and a 12-month time frame, we believe it is necessary to adjust our rating accordingly.”

Woronka said the fundamental momentum in the core business is positive, including demand and pricing trends, and noted that management is adjusting the company’s positioning to capture opportunities in autonomous vehicles and driverless taxi services. The analyst expects that trading dynamics will continue to be the stock’s main driver in the short term.

Deutsche Bank did not change any forecasts or adjust its target multiples alongside the downgrade.

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