Why Is Carvana (CVNA) Stock Up 15% Today?

  • Carvana (CVNA) stock is climbing thanks to an upgrade.
  • JPMorgan analyst Rajat Gupta bumped shares up to a “neutral” rating.
  • The analyst maintained his $20 price target for CVNA stock, however.
Carvana (CVNA stock) logo on white object in foreground as well as a high-rise building in the background

Source: Jonathan Weiss / Shutterstock.com

Carvana (NYSE:CVNA) stock is climbing higher on Tuesday after JPMorgan analyst Rajat Gupta upgraded shares of the company.

That upgrade has Gupta bumping CVNA stock up from an “underweight” rating to a new “neutral” rating. For comparison, the current consensus rating for Carvana stock is a “hold” rating, based on nine “buy” ratings and 13 “hold” ratings among analysts.

One thing that hasn’t changed,, however, is Gupta’s maintained price target of $20 per share. That represents a nearly 48% upside from CVNA stock’s closing price on Monday. To put that in perspective, the analyst consensus price prediction for the stock is $49.55 per share.

Why The Bullish Switch for CVNA Stock?

The JPMorgan analyst gave the following reasoning for his new rating on CVNA stock in a note, per CNBC:

“Importantly, as we highlighted in our preview, carve-outs in their debt indentures allow for an additional ~$4bn+ of debt which can be borrowed on a secured basis. Clearly, these are not ideal outcomes and will be very expensive, but any progress demonstrated on tapping even a slice of the $2 bn in real estate, could temporarily shun concerns around liquidity and thus, survivability.”

Despite the upgrade, CVNA stock isn’t seeing heavy trading today. Only about 3 million shares have changed hands as of this writing. The company’s daily average trading volume is well above that at about 10.5 million shares.

CVNA stock is up 15.6% as of Tuesday morning but down 93.4% since the start of the year.

Investors seeking out more of the latest stock market news are in luck!

We’ve got traders covered with all of the hottest stock market stories for Tuesday! That includes what has shares of Abiomed (NASDAQ:ABMD) stock and SoFi Technologies (NASDAQ:SOFI) stock on the move, as well as this morning’s biggest pre-market stock movers. You can read up on all of that news at the following links!

More Tuesday Stock Market News

On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2022/11/why-is-carvana-cvna-stock-up-15-today/.

©2023 InvestorPlace Media, LLC