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Carvana Earns Rating Upgrade Ahead Of Q2 Results

Benzinga · 07/27/2022 13:46
  • Raymond James UPGRADED Carvana Co (NYSE: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.