Avis Budget Group: Remain Underweight Unsecured Bonds; Short-Risk 5-year CDS; Neutral the Term Loan

Research evidence excerpt

Avis Budget Group: Remain Underweight Unsecured Bonds; Short-Risk 5-year CDS; Neutral the Term Loan

J P M O R G A N North America Credit Research

28 July 2026

Underweight

Avis Budget Group CAR

Remain Underweight Unsecured Bonds; Short-Risk 5-

year CDS; Neutral the Term Loan

North America Corporate Credit -

Credit View: Avis Budget Group’s (CAR) 2Q26 results had puts and takes, but Aerospace & Defense (HY & IG) and

overall performance was weaker than our expectations due to weaker Industrials (HY) and Services (HY)

demand. The company’s comment of weaker demand in the quarter was surprising AC Yilma Abebe

given other travel-related businesses have highlighted strong demand. This

(1-212) 270-3265

implies CAR likely had excess fleet entering the quarter. In the quarter pricing was yilma.abebe@jpmorgan.com

about flat y/y compared to +3% y/y in 1Q26, which was a step backwards after solid Austin Maltbia

pricing in 1Q. Pricing in the quarter was negatively impacted by CAR’s deliberate (1-212) 834-4684

mix shift towards longer duration rentals. Considering risks to travel demand, we austin.maltbia@jpmchase.com

are not yet comfortable with the view of sustained pricing improvement. We are J.P. Morgan Securities LLC

maintaining our Underweight recommendation on Avis unsecured bonds and

recommending short-risk 5-year CDS. We remain Neutral the Avis secured

term loan.

Earnings recap: Avis reported 2Q26 revenue of $2,998 million (-1% y/y)

compared to consensus of $3,106 million, adjusted EBITDA of $286 million (+3%

y/y) compared to consensus of $257 million, and adjusted free cash flow of $81

million (was $17 million in 2Q25) compared to consensus of $212 million.

Earnings Review Leverage Stats

($ millions) 2Q.26 2Q.25 y/y ∆ JPME Consensus ($ millions) 2Q.26 1Q.26