Morgan Stanley on Carvana (CVNA) Amid Macro Credit Fears: 'Fears may be overblown – we view the pullback in CVNA shares as an opportunistic entry point'

Morgan Stanley analyst Adam Jonas reiterated an Overweight rating and $450.00 price target on Carvana (NYSE: CVNA).

The analyst comments "Investor concerns are not unfounded – while prime auto performance improved with 3Q bank earnings revealing lower delinquencies and accelerating originations… ...loan-level data suggests subprime is showing incremental signs of stress with elevated DQs and deteriorating macro data weighing on low-income consumers. However, rising DQs has been a gradual trend since '22, affording auto issuers like CVNA time + flexibility to adjust parameters to maintain performance (GoS). With CVNA's economic exposure to existing vintages relatively limited, the risk is to gain on sale for future securitizations should sentiment deteriorate. We forecast reversion to CVNA's historical GoS to account for volatility and note downside risk which may weigh on margin + ability to monetize future loans."

For an analyst ratings summary and ratings history on Carvana click here. For more ratings news on Carvana click here.

Shares of Carvana closed at $333.81 yesterday.

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