Citi upgrades Carvana to Buy on ‘dislocation’ post short report

Citi analyst Ronald Josey upgraded Carvana (CVNA) to Buy from Neutral with a price target of $277, up from $195. The firm believes Carvana is ramping inventory to meet growing demand and is doing so more efficiently. Citi cites improving new-vehicle supply unlocking used demand and says Carvana inventory is expanding to meet demand. Citi’s website tracking suggests Carvana’s sales could come in 7% above consensus, the analyst tells investors in a research note. The firm reviewed the recent short report on the shares and post Carvana’s organizational changes that began in 2022, and believes the company is better positioned across most facets of its organization. With the shares down 22% since the recent highs on December 16, investors should “take advantage of the dislocation in shares,” contends Citi.