What Happened?
Shares of online used car dealer Carvana (NYSE: CVNA) jumped 3.3% in the morning session after investment bank Oppenheimer upgraded the stock to Outperform from Perform, setting a $450 price target.
The investment bank's analysts pointed to a more efficient cost structure, increased cash generation, and a better demand environment for the used-car retailer. Oppenheimer also noted the potential for Carvana to gain market share as tariffs were expected to increase the prices of new cars, a factor that could push more buyers into the used vehicle market. The firm significantly raised its adjusted EBITDA forecast for Carvana's second quarter to $561 million, surpassing the consensus analyst expectation of $532 million. Further bolstering investor confidence, research firm BTIG also maintained its Buy rating on the stock.
After the initial pop the shares cooled down to $329.85, up 1.2% from previous close.
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What Is The Market Telling Us
Carvana’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 3.2% on the news that investment firm Gordon Haskett initiated coverage on the stock. Analyst Robert Mollins began coverage with a "Hold" rating and set a price target of $329.00 for the online used-car retailer. A "Hold" rating typically suggests that an analyst believes the stock will perform in line with the broader market and recommends that investors maintain their current position. While not a "Buy" rating, the initiation of coverage by a new firm can bring increased attention and trading volume to a stock, which can sometimes lead to a price increase as new investors evaluate the company.
Carvana is up 65.3% since the beginning of the year, and at $329.85 per share, it is trading close to its 52-week high of $357.32 from July 2025. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $2,187.
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