Carvana Investors Are 'Overly Optimistic,' Analyst Says In Downgrade
Portfolio Pulse from Priya Nigam
Jefferies analyst John Colantuon has downgraded Carvana Co (NYSE:CVNA) from Hold to Underperform, reducing the price target from $55 to $30. The downgrade is due to 'overly optimistic' Street expectations following the company's 'elevated profitability' in Q2 and Q3 of 2023. Colantuon believes the company's GPU (gross profit per unit) is temporarily benefiting from transitory tailwinds that will normalize in the second half of 2023.
July 31, 2023 | 3:59 pm
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Carvana's stock has been downgraded by Jefferies due to overly optimistic expectations. The company's GPU is expected to normalize in the second half of 2023, which could negatively impact the stock.
The downgrade by Jefferies is based on the belief that the company's recent profitability is due to temporary factors that will normalize in the coming quarters. This could lead to a decrease in the company's stock price as the market adjusts to the new expectations.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100