- Carvana shares rose following an upgrade and a significant price target hike from J.P. Morgan.
- Analysts were optimistic that the car retailer would Online Used Cars can successfully navigate the current phase of macroeconomic uncertainty and the used car industry. "
- Carvana shares have taken off this year, climbing more than 700%.
Carvana (CVNA) shares soared after J.P. Morgan analysts' positive comments on the online used car retailer.
The bank raised the title from underweight to neutral and increased its price target by 60%, from $25 to $40.
J.P. Morgan praised Carvana's progress in productivity, costs and culture. He argued that these measures allowed the company to be better able to “take advantage of the return to growth”; compared to 2019-2020.
Analysts added that the “known unknowns” about Carvana are now better appreciated by investors. They said it was possible the company “could navigate its way through this uncertain phase of the macroeconomy and used car industry in a manner that which limits the reductions in estimates in the short and medium term.
However, analysts have warned that rising interest rates and the company's pause in investment to manage profitability “mean volume growth is likely to be moderate, with the valuation still relatively high.”
Carvana shares jumped today and have soared more than 700% this year.
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