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Goldman Lifts Carvana’s PT To $270 On 3Q Outlook
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Goldman Lifts Carvana’s PT To $270 On 3Q Outlook

Goldman Sachs raised the price target on Carvana Co. (CVNA) stock to $270 (21.6% upside potential) from $250 and maintained a Buy rating. Shares of the online used car retailer are up around 3% in the U.S. early morning trading.

Goldman analyst Daniel Powell updated his estimates after Carvana last month indicated that it may report breakeven EBITDA in 3Q on Oct. 29. The analyst said “While we do not expect the company to be profitable every quarter from this point on, the positive surprise on EBITDA for Q3 is indicative of the strong demand backdrop and scale advantages we expect the company to continue to lean into as it drives the used auto category online.”

Powell expects “incrementally looser supply and improving utilization to aid growth for multiple periods while scale should deliver operating leverage above consensus expectations.”

On Sept. 23, Carvana provided a business update hinting at record 3Q results across several key metrics, including retail units sold, total revenue, total gross profit per unit or GPU and EBITDA margin. The company also anticipated to report breakeven EBTIDA in 3Q. (See CVNA stock analysis on TipRanks)

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 12 Buys and 7 Holds. The average price target of $227.17 implies upside potential of about 2.3% to current levels. Shares have gained about 140.1% year-to-date.

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