BTIG reiterates Buy rating on Carvana, $87 price target

Carvana (CVNA) stock rose 5% after Jefferies reiterated a Buy rating and $88 price target, citing September sales tracking 40% above expectations. The firm noted strong unit sales and improved investor sentiment in used-vehicle retail. Carvana's shares are highly volatile, down 20.2% YTD and 33.3% from its 52-week high.

Carvana (CVNA) stock rose 4.7% to $63.30 after Jefferies reiterated its Buy rating and $88 target, citing strong retail unit growth data. Morgan Stanley also highlighted Carvana's AI advantages. Shares had fallen earlier due to regulatory concerns involving a major stakeholder. The broader market remained flat, allowing Carvana's rally to stand out.

Carvana (CVNA) stock fell 33% from its 52-week high despite record Q2 results, with revenue at $7.376B and adjusted EBITDA at $769M. The decline was driven by a lower full-year EBITDA guide and concerns over subprime auto loan delinquencies, exacerbated by the Fed's rate hike. Analysts see a potential 78% total return with a target price of ~$116, but risks include credit cycle impacts on growth and margins.

Several sectors, including asset managers, semiconductor stocks, and silver miners, experienced significant declines following Fed Chair Kevin Warsh's press conference. ON Semiconductor (NASDAQ:ON) led the drop, falling 6%, while Boeing (NYSE:BA) weighed on the Dow. Economists are divided on future rate hikes, with some expecting more hikes and others predicting easing next year.

Amazon (AMZN) is down 19% since reporting Q2 results. Coupang (CPNG) reported $8.86B revenue, up 3.9% YoY, missing expectations. Wayfair (W) reported $3.52B revenue, up 7.5% YoY, beating estimates. Carvana (CVNA) reported $7.38B revenue, up 52.4% YoY, with mixed results. Market focus has shifted from AI to geopolitics and back to fundamentals.

Morgan Stanley maintains an Overweight rating and $90 price target for Carvana (CVNA), citing durable sales growth, underrated free cash flow, and cost savings. The stock is near $74, down 7% YTD, despite strong Q2 performance. Analyst Daniela Haigian expects high 30% sales growth in H2, limited by supply, not demand. Gross profit per unit fell 6% in Q2 but is expected to stabilize by 2030.