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Glance-STOCKS NEWS EUROPE-Avis Europe drops after profit warning
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Stocks on the move Real (Frankfurt: BJU.F - news) -time Equity News
09:17GMT 17Nov2008-Avis Europe (LSE: AVE.L - news) drops after profit warning
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Shares in Avis Europe shed 30.8 percent after Europe's biggest car
rental company warned on full year profits in an interim management statement
(IMS) prompting Dresdner Kleinwort to cut its estimates and target price.
Avis Europe says the used car market and the economic environment are weaker
than it expected and that underlying pretax profit for the year will be slightly
below last year's 37.6 million euros ($47.70 million).
Dresdner Kleinwort says Avis's third quarter IMS signals an anticipated
downturn in volumes and a softer pricing environment than in the first half,
with the main response being to impose significantly higher pricing, up to 20
percent across the industry, at the expense of volume.
The broker notes that at the same time Avis is making a further round of
cost cuts and it has reduced its forecasts to reflect this revised outlook.
Dresdner Kleinwort says, as a result it has cut its target price for Avis to
10 pence from 25, while reiterating its 'hold' rating on the stock.
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