Wedbush keeps $1 target on Carvana, says offer ‘not a game-changer’

Wedbush analyst Seth Basham says Carvana’s exchange offer for unsecured bonds is "not a game-changer" and that a larger restructuring is still likely. The firm sees the exchange offer as pitting two groups of unsecured bond holders against each other. Carvana’s negotiating leverage will likely diminish from here, as the moves do not solve its "ultimate problem of extreme cash flow burn and a limited liquidity timeline," the analyst tells investors in a research note. Wedbush looks favorably on the accelerated cost cuts, but says they will likely continue to impede any unit sales growth at Carvana. It keeps an Underperform rating on the shares with a $1 price target.