Shares of Carvana are trading more than 5% higher after a Wall Street analyst upgraded the stock this morning.
The online automobile retailer based out of Tempe, AZ, has seen a busy week of trading as the stock has been battling with Technical Support at $175. Shares have seen volatility at that price following several headlines, including news that Amazon.com is mulling the idea of getting into the online car sales business.
That potentially negative headline was offset by Piper Sandler's upgrade of the stock from neutral to a strong buy this morning. The firm also upgraded its price target to $225 per share.
On average, Wall Street analysts have been tepid on the stock, with several downgrades lately as consumer confidence continues to decline. Wall Street's average target price for Carvana shares is $268 which has dropped significantly over the last three months.
Just one month ago, Carvana delivered its latest quarterly earnings report, which came in much better than analysts’ expectations. Carvana earnings were $0.56 per share, against analyst expectations of $0.31. The company also beat its revenue guidelines, showing 46.3% year-over-year growth in total revenue.
Shares are trading more than 30% lower after that earnings report since the company management announced expansion plans that will require heavy capital expenditure.
Shares are now bouncing off the $175 level, a price that investors clearly see as support from the January 2025 lows. At the same time, the stock is also battling its 200-day moving average, which currently resides at $188.
Investors should monitor the $175 level. Closely over the next week as a break below that, we'll target the next support level of $150.
Despite the short-term weakness in the stock, Shares remain in a long-term bull market trend with a price target of $325. This indicates that a move to $150.00 would represent a buy-the-dep opportunity for Carvana stock.
