A customer boards an Avis Budget Group Inc. shuttle bus at the Denver International Airport (DEN) in Denver, Colorado, U.S., on Wednesday, Oct. 28, 2015.

Shares of car-rental company Avis Budget Group surged more than 7 percent Monday after an analyst at Goldman Sachs completely changed his tune on it.

Analyst David Tamberrino upgraded Avis to buy all the way from sell and hiked his 12-month price target on the stock to $35 from $30. Tamberrino's new price target implies a 36.3 percent rise from Avis' close of $25.68 on Friday.

"We believe valuation looks attractive for mean reversion — currently trading at 6.2x our 2019E EBITDA estimate vs. a historical trough multiple of 5.9x and long-term average 8.4x — as most of the headwinds the industry (and the company) is facing appear priced in," Tamberrino said in a note to clients.

Avis shares plunged nearly 49 percent last year, notching their worst annual performance since 2008, when they shed 94.62 percent. The stock is up more than 14 percent to start 2019.

"With CAR's valuation below historical averages, we see an opportunity for the company's multiple to mean revert as we believe data points on volumes and pricing are stabilizing and the company can start realizing benefits from cost savings actions," Tamberrino said.

Tamberrino added, however, that some of the risks Avis faces include increasing price competition from rivals like Hertz Global and ride-hailing companies like Uber as well as rising interest rates. The Federal Reserve raised rates four times last year.

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