BofA downgrades Carvana to Neutral on liquidity concerns

BofA analyst Nat Schindler downgraded Carvana to Neutral from Buy with a price target of $10, down from $43, citing concerns about its cash burn and liquidity. Carvana has been struggling to turn profitable and is burning through cash quickly with about $600M in annual interest expense and now about $477M in cash and inventory of $2.6B, which is "far outweighed" by its long-term notes payable of $6.6B, Schindler said. Without a cash infusion, he now thinks Carvana is likely to run out of cash by the end of 2023, Schindler added.