Carvana (NYSE:CVNA) stock is on the move Friday after RBC Capital analysts updated their price target for the used-car retailer’s shares.
This has the firm’s analysts increasing their price target for CVNA stock from $45 per share to $90 per share. That represents a potential upside of 13% over its previous closing price. It’s also well above the analyst consensus price prediction of $44.53 per share.
In addition to that new price target comes an upgrade for CVNA stock. This bumps it up from an “underperform” rating to a “sector perform” rating. The analyst consensus rating for Carvana shares is a hold based on 14 opinions.
What’s Behind the New CVNA Stock Price Target?
Here’s what the RBC Capital analysts said about Carvana in a note to clients obtained by Investing.com:
“We believe any return to more meaningful unit growth will likely get fully if not overly extrapolated in the stock with additional amplification possible from the heavy short interest […] While we estimate CVNA owes roughly $7.4B over the next 7 years, we lay out recent improvements in per car profitability suggesting at least some unit growth likely gets them decent clearance to cover future debt costs.”
CVNA stock is up 10.6% as of Friday morning!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
