Avis Budget Group (NASDAQ:CAR) shares dropped 9% on Thursday, extending a sharp selloff after plunging 38% in the previous session, as momentum from a recent short squeeze began to fade and JPMorgan downgraded the stock.
JPMorgan downgrade despite higher price target
Analyst Ryan Brinkman lowered his rating on Avis Budget from Neutral to Underweight, while raising the price target to $165 from $123 to reflect potential opportunities in capital markets.
“We view the recent extraordinary ’short-squeeze’ driven rally in Avis Budget (CAR) shares as a potentially significant opportunity for management to create lasting value via opportunistic capital market transactions, but are nevertheless downgrading the stock to Underweight from Neutral, given our sense that the shares have risen far above the level we feel can be justified by even the most optimistic view of underlying earnings fundamentals,” Brinkman commented.
Shares still elevated despite pullback
Even after the steep declines over the past two sessions, Avis Budget stock remains significantly higher, with gains of around 340% over the last 30 days, fueled by the earlier short squeeze that preceded the recent downturn.