Carvana removed from ‘Tactical Outperform’ list at Evercore ISI

Evercore ISI is closing the firm’s positive trading call on Carvana (CVNA) and removing the stock from the firm’s “Tactical Outperform” list in light of the CarMax (KMX) earnings release, which discussed broad based weakening of credit trends and lower consumer confidence readings in September with the election still ahead. The firm’s sense is that Carvana’s credit should prove more resilient than CarMax, but with the stock having appreciated about 20% since the firm had initiated the positive TAP call, and given likely concern for the industry broadly with Ally (ALLY) having experienced deteriorating credit trends and now CarMax having reported higher loan losses, Evercore sees the near term risk reward as balanced. Evercore keeps an In Line rating and $178 price target on Carvana shares.