Now is the time to snag shares of Carvana , according to Morgan Stanley's Adam Jonas. The widely followed analyst upgraded the online used car marketplace to overweight from equal weight. He also raised his price target on the stock to $280 from $260, signaling more than 31% upside from Monday's close.
Jonas labeled Carvana "a unique opportunity for investors to gain exposure to a leader in auto retail and fleet fulfillment," in light of the stock's more than 8% pullback in March. CVNA YTD mountain Carvana stock in 2025. Previously, Jonas was cautious on Carvana because of the high leverage on its balance sheet.
Those worries have now abated thanks to strong free cash flow generation, which can help pay down the company's $5.6 billion corporate debt. "While Carvana remains more exposed to a lower strata of auto credit relative to the rest of our auto coverage, the company has demonstrated execution with profitable growth and addressed leverage concerns," Jonas said.
Jonas also pointed to Carvana's "impressive operating execution" as well as its performance relative to peers in the sector. He noted that Carvana has shown an ability to grow its used vehicle volume, which amounted to four-straight quarters of double digit retail unit growth year-over-year in 2024. Shares were up nearly 4% after the upgrade.
Analysts are generally split on the stock, however. Of the 24 who cover it, 12 rate it a buy or strong buy, according to LSEG. Another 12 have a hold or underperform rating.
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