Shares of Avis Budget Group (CAR -1.63%), a global provider of mobility solutions and rental vehicles through its Avis and Budget brands, were trading 8% higher as of 1:32 p.m. EST Friday.
One possible news item that could have been motivating investors to bid the shares up was Morgan Stanley analyst Billy Kovanis' recent upgrade of Avis Budget.
Kovanis kept an overweight rating on the stock, which is an optimistic view of its potential, and lifted his price target from $44 to $56. That move was based on his prediction that travel will inevitably rebound and that Avis will benefit more from that than the market is currently giving it credit for.
After reaching what was by far their worst peak of the pandemic last month, new COVID-19 diagnoses in the U.S. have been heading downward steadily in recent weeks. The number of new coronavirus cases per day has averaged 77,665 over the past week, which is was a 43% decline from the prior two-week average, according to The New York Times.
It's been a volatile week for Avis Budget stock. Shares initially declined after the company reported fourth-quarter results, but they have since recovered. That rebound seems warranted given that the company removed more than $2.5 billion in costs from operations during 2020, beat analysts' estimates for fourth-quarter adjusted earnings per share, downsized its vehicle fleet to match demand, and has $1.3 billion in liquidity that it can use to ride out the rest of the low-travel period that the pandemic has caused. With competitor Hertz continuing its bankruptcy process, Avis will remain an intriguing story within the automotive industry throughout 2021.