Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Carvana Slides After Downgrade by RBC Capital

Published 04/05/2022, 10:01 AM
Updated 04/05/2022, 10:02 AM
© Reuters

By Sam Boughedda

Investing.com -- Carvana Co (NYSE:CVNA) started Tuesday's session more than 4% lower after RBC Capital downgraded the stock.

Analyst Brad Erickson downgraded the online used car retailer from Outperform to Sector Perform, setting a price target of $138, down from $155.

The analyst said in a note that they are "no longer able to justify the risk/reward as asymmetrically positive for CVNA and thus, downgrade to Sector Perform."

The analyst added that the company's acquisition of US auction business Adesa "raises the downside risk from any perceived demand shortfall."

"Adesa’s upcoming multiyear integration is likely to be challenging. We need more confidence in unit growth necessary to justify the capacity hyper-expansion & cash generation to support the ever-rising b/s leverage and likely future capital raises," concluded Erickson.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.