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Avis equities (CAR; B1, BB-; S) getting support on BoFA initiation

  • BoFA analysts initiated on Avis with a price target of $170. It expects it to have stronger earnings recovery on steady pricing and cost efficiency efforts.
  • 29's are flat since issue & neither it nor the 30's seem to be partaking in the strong HY compression (ex. CCC's) we've seen this year.
  • Higher for longer rates isn't positive for Avis but used car prices in Feb CPI did come in at strong +0.5% M/M (analyst were looking for -1% on avg.) - follows a -3.4% print in Jan that weighted on its equities (& came with a credit-selloff) during earnings.
  • Unfortunately lead indicator, the Manheim index (SA), continued declining -0.6% in first half of March, now down -14.9% yoy.
  • Cash lines continue trading on wide-end of BB's - as we've said previously, we'd stay clear till seasonally weak quarter & de-fleeting is over. Management has not been BS/credit friendly recently with FCF.

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