Carvana (NYSE:CVNA) stock is on the move Monday following a new price prediction for the used car retailer’s shares.
Jefferies analyst John Colantuoni is behind this news as he dropped his price target for CVNA shares from $55 per share to $30 per share. To put that in perspective, the analysts’ consensus price prediction for CVNA is $40.47 per share. It also represents a potential 31.8% downside for the stock over the next year compared to yesterday’s closing price.
To go with that lowered price prediction, Colantuoni also downgraded CVNA stock from a “hold” rating to an “underperform” rating. For comparison, the analysts’ consensus rating for CVNA shares is “reduce” based on 21 opinions.
What’s Behind the Bearish Stance on CVNA Stock?
Here’s what the Jefferies analyst had to say about Carvana in a letter to clients obtained by CNBC:
“We believe GPU [gross profit per unit] is temporarily benefiting from transitory tailwinds like wider wholesale/retail spreads and the timing of loan sales, which we expect to normalize throughout 2H23. We also envision an acceleration in Unit growth next year leading to inefficiencies that further negatively impact per unit economics.”
Movement for CVNA stock today includes more than 4 million shares changing hands as of this writing. That’s still well below the company’s daily average trading volume of about 32 million shares.
CVNA stock is up 1.4% as of Monday morning despite the downgrade. The company’s stock is also up 862.6% since the start of the year.
Investors can find even more of the most recent stock market news ready to go below!
We’ve got all of the latest stock market coverage that traders need to know about on Monday! That includes everything happening with shares of Nikola (NASDAQ:NKLA), Archer Aviation (NYSE:ACHR), and SoFi Technologies (NASDAQ:SOFI) stock today. That news is ready to go with the following links!
More Stock Market News for Monday
- Nikola (NKLA) Stock Jumps on New Truck Order
- ACHR Stock Alert: Archer Just Got a $142 Million Boost
- Why Is SOFI Stock Up 19% Today?
On the date of publication, William White did not have (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.
