Carvana Co (CVNA – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Mike McGovern from Bank of America Securities maintained a Buy rating on the stock and has a $220.00 price target.
Mike McGovern’s rating is based on several strategic advantages that Carvana Co. holds in the current market environment. The imposition of tariffs on imported vehicles and parts is expected to make new cars more expensive, potentially shifting consumer preference towards used cars. Carvana, with its substantial inventory of affordable vehicles, is well-positioned to capitalize on this shift, offering a significant portion of its cars under $20,000.
Additionally, Carvana’s improvements in delivery speed enhance its competitive edge, as faster delivery times are a key factor influencing purchase decisions. The potential policy change to make auto loan interest tax-deductible could further benefit Carvana by reducing the overall cost of vehicle ownership, making used cars more attractive. These factors, combined with Carvana’s ability to maintain gross profit margins despite increased parts costs, support McGovern’s Buy rating for the stock.
In another report released on March 25, Morgan Stanley also upgraded the stock to a Buy with a $280.00 price target.
CVNA’s price has also changed moderately for the past six months – from $171.210 to $204.870, which is a 19.66% increase.