Key Takeaways
- Carvana shares rose Friday following a price target raise from JPMorgan analysts, who expect the company to beat analyst estimates when it reports earnings July 31.
- The analysts said Carvana has given itself some “wiggle room” after posting its first profitable year in 2023, and its best financial quarter in company history earlier this year.
- The company has completed a “sharp turnaround” over the last year, the analysts wrote.
Carvana (CVNA) shares rose Friday following a prediction of an earnings beat from JPMorgan analysts, who lifted their price target on the online car seller’s shares for the fourth time this year.
The analysts predict that Carvana will beat consensus estimates when it reports earnings at the end of the month as the company’s margins improve amid cost-cutting efforts that helped deliver Carvana’s best quarter on record earlier this year.
The shares, recently up about 3%, have risen roughly 150% this year and sit just a bit below year-to-date highs.
Analysts’ Price Target Well Above Consensus
Carvana posted its first profitable year in fiscal 2023. JPMorgan analysts said Friday that the company has given itself “wiggle room to add some slack to drive accelerated growth and demonstrate leverage on fixed costs.”
While the company “has demonstrated a sharp turnaround in operations over the last 12-18 months, we believe the next phase of ‘profitable growth’ requires maintaining the recent high level of execution intensity” across the company, the analysts wrote.
The analysts lifted their price target to $155 from $150 and reiterated an “overweight” rating on the stock. Their target is substantially above the consensus of analysts tracked by Visible Alpha, which is near $118.
Wall Street is looking for quarterly revenue of $3.27 billion and a net loss of $16.1 million when it reports second-quarter results later this month, according to Visible Alpha. Its results are expected July 31.