Mike McGovern, an analyst from Bank of America Securities, reiterated the Buy rating on Carvana Co. The associated price target was raised to $455.00.
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Mike McGovern has given his Buy rating due to a combination of factors including Carvana’s recent inclusion in the S&P 500 index, which is expected to act as a significant catalyst for the stock. This inclusion reflects Carvana’s consistent profitability over several quarters, despite initial skepticism regarding voting rights as a potential barrier.
Moreover, Carvana’s unit growth appears to be outpacing market expectations, driven by strong consumer demand and competitive pricing strategies compared to rivals like CarMax. The company’s financial outlook is further bolstered by improvements in its capital structure, such as credit rating upgrades, which contribute to a lower cost of capital. These factors, combined with a revised price objective of $455 based on a discounted cash flow analysis, underscore McGovern’s confidence in Carvana’s growth potential and justify the Buy rating.
McGovern covers the Consumer Cyclical sector, focusing on stocks such as DoorDash, Carvana Co, and CarMax. According to TipRanks, McGovern has an average return of 4.8% and a 48.15% success rate on recommended stocks.
In another report released on December 1, UBS also initiated coverage with a Buy rating on the stock with a $450.00 price target.