Although Avis Budget Group’s truck rental business is experiencing pricing pressure and the economy is weakening, revenue enhancement and cost cutting initiatives have been implemented that should fuel significant financial improvements, according to an analyst blog by Steven Ralston, CFA, on Zacks.com.

Earnings visibility is limited, however, especially with a deteriorating economy and declining enplanements. Historical valuation data is unavailable for Avis Budget Group. Management has lowered guidance twice for 2008 in view of weaker-than-expected enplanements and lower commercial travel volumes.

The target of 75 cents is based on a 7 P/E multiple on our 2009 depressed EPS estimate, which is approximately where a 5 percent cyclical growth company (with a levered balance sheet and exposed to the risk of falling residual values of its rental fleet) should be valued with the U.S. economy in a recession.