Piper upgrades Carvana to Overweight on selloff, sales growth

Piper Sandler upgraded Carvana (CVNA) to Overweight from Neutral with an unchanged price target of $225. Most used car transactions don’t span international borders, and demand is relatively stable, regardless of the macro environment, the analyst tells investors in a research note. Further, Piper believes “staid business models and extreme fragmentation have left the door open to disruptors.” Given this, the firm upgraded both Carvana and ACV Auctions to Overweight following the recent share pullbacks. For both companies, since market share is starting from a low base, Piper expects multi-year revenue growth of over 20% annually, with even faster earnings growth. The firm thinks the stock can grow despite macro unease and/or higher tariffs.