Verra Mobility Downgrade to Underweight: Termination of Agreement Notice From Avis Warrants a Cautious Stance

研报英文原文证据摘录

Verra Mobility Downgrade to Underweight: Termination of Agreement Notice From Avis Warrants a Cautious Stance

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

27 May 2026

Verra Mobility ▼Underweight

Previous: Neutral

Downgrade to Underweight: Termination of Agreement VRRM, VRRM US

Price (26 May 26):$13.08

Notice From Avis Warrants a Cautious Stance ▼Price Target (Dec-26):$8.00

Prior (Dec-26):$17.00

North America Small and Mid Cap

Industrials

Tomohiko Sano AC

(1-212) 622-1099

tomohiko.sano@jpmorgan.com

After a long history with Avis, Verra announced on May 26 that Avis terminated Ethan Coyle

its contract effective Sept. 2026. We are lowering our estimates associated with the (1-212) 270-0613

ethan.coyle@jpmchase.com

loss of this contract (see table 1), and downgrading Verra to Underweight from

Brendan Shea, CFA

Neutral, reflecting our lowered price target to $8 (from $17) reflecting 5.5x our

(1-212) 622-0770

2027 estimated adj. EBITDA. While we believe in the long-term fundamentals of brendan.shea@jpmorgan.com

GS, the contract loss and margin pressure from the NYC contract warrant a Liam Glass

cautious stance, as we prefer opportunities elsewhere in our coverage. (1-212) 464-5541

liam.glass@jpmorgan.com

• Contract Shock: Avis Termination Creates Material Headwind: Post- J.P. Morgan Securities LLC

market close on May 26, 2026, Verra published a press release (see here)

announcing the termination notice from Avis Budget Group (covered by Rajat

Gupta), effective September 2026. The company will take steps to reduce costs Key Changes (FYE Dec)

and reallocate resources associated with the customer. The termination came Prev Cur Δ

Adj. EPS - 26E ($) 1.37 1.23 -10.1%

as a clear shock, with CEO David Roberts stating, “We were surprised and Adj. EPS - 27E ($) 1.59 1.20 -24.6%