Carvana Earns Rating Upgrade Ahead Of Q2 Results

Raymond James upgraded Carvana Co CVNA to a Market Perform from an Underperform rating, ahead of their 2Q22 results scheduled next month.
The analysts lowered 2022E/2023E adjusted EBITDA to a loss of $(730) million and a profit of $38 million, compared to the previous forecast of $(600) million and a profit of $122 million, respectively.
The analysts lowered estimates but believe current valuation levels appear more balanced following a ~40% decrease in share price since May 10.
"Although we believe CVNA has a long runway for growth in the coming years, and the ADESA acquisition is strategically sound,", Raymond James said
"A more favorable entry point for shareholders is likely a few quarters away when the company can show sustainable EBITDA margin progress," the analysts added.
For Carvana, industry lagging indicators are likely to be accompanied by continuing pressures in the supply chain and the temporary headwind of rapidly rising interest rates.
Price Action: CVNA shares are up 4.01% at $25.15 during the market session on the last check Wednesday.

Analyst Calendar