Both shares of American car rental companies Avis Budget Group Inc. (NASDAQ: CAR) and Hertz Global Holdings Inc (NYSE: HRI) have seen a jump in shares these past few weeks due to the storms that devastated the southern part of the U.S. However, many analysts believe that stock price will decline since Avis has been facing challenges regarding strong competition and balance sheet leverage. In June, both of the companies’ stocks rebounded from multi year lows where Avis shares jumped 80% and Hertz at 160%.
Avis and Hertz should see a stronger demand in Florida, Texas, and other parts affected by the hurricanes since there is a seasonally slow time for rentals currently when travel is declining. The two companies can benefit from car damages since there has been an increase in demand and prices for used vehicles. While being the second and third biggest players in the American rental car market, both companies have seen a rise in shares where Avis shares are just over half of their value since 3 years and and Hertz shares are less than one fifth of theirs.