Shares soar as analysts pile on with glowing reports
Powered by analyst positivity and improved sales, Carvana shares were driving on an uphill grade for most of June, and that momentum pushed the stock to even greater heights on Monday. The Motley Fool reported that Carvana (NYSE:CVNA) shares rose 29% during June, starting with a 19% jump early on and continuing unevenly but steadily through the month.
The rise has continued in the early part of July for the Tempe-based used-car sales site, with shares finishing Monday up 4.6%, or $5.91, to close at $134.44, after reaching new 52-week high of $137.72 earlier in the day. That’s up more than $14 from the June 30 price. On Tuesday, the shares dipped slightly, closing down $1.33, or 1%, to $133.11. Track the stock here.
The Monday surge followed upbeat remarks from Bank of America analyst Nat Schindler pointing out the June trend and an all-time high in Carvana app downloads at the same time.
“We are challenged to find another company in our coverage cluster with as large of a market opportunity ahead of it and believe CVNA is well capitalized for NT challenges,” Schindler wrote.
BofA kept a Buy rating on the company and raised its share price target from $100 to $150. Similarly, JMP Securities raised its price target to $155 from $105.
In addition, in late June Carvana launched a direct-purchase platform for dealers to buy wholesale vehicles from Carvana.
The bounce for Carvana represents the continuation of a comeback after the shares tanked in March and April as the Covid-19 pandemic set in and demand for cars took a break. At that time, shares dipped below $23.
On May 6, Carvana reported first-quarter earnings and revenue numbers that fell short of Wall Street expectations. Although the company’s revenue rose more than 40% compared with the year-earlier period to $1.09 billion, that still fell short of analysts’ prediction of $1.13 billion.
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