BTIG Reiterates Buy Rating on Carvana (CVNA)

BTIG analyst Marvin Fong reiterated a Buy rating and $87.00 price target on Carvana (NYSE: CVNA).

The analyst comments "Wholesale prices (not SA) fell 1.2% y/y and 1.3% m/ m in September. Meanwhile, used car list prices rose 1.7% y/y and fell 0.6% m/m. Using our preferred method of lagging wholesale prices by 3 months to account for reconditioning prep and inventory cycle time, we calculate the retail-wholesale spread for the third quarter was $9,139, up 0.5% y/y. Sequentially, the retail-wholesale spread declined 6.0%, fairly consistent with normal seasonality as the spread has contracted by an average of 5.4% from 2021-2025. In short, used car margins are largely stable and the rate of change is within normal parameters. Other demand indicators support that contention. For example, used car days supply is tracking in the mid-to-high 40s, about flat y/y. In terms of how this data compares against expectations, the retail-wholesale spread lines up reasonably well with Street expectations for CVNA to deliver $3,525 in 3Q26 retail GPU, down ~0.4% y/y. While the spread is higher y/y vs. expectations for slight retail GPU compression at CVNA, we see lingering reconditioning efficiency issues that first emerged late last year as explaining the divergence. Specific to our model, we are maintaining our slightly below-consensus retail GPU estimate of $3,490, but increasing our estimate for 3Q26 retail units to 207,500 from 203,000 on the back of strong traffic data. That puts us slightly ahead of the 206,900 consensus. However, we are lowering our Other GPU estimate to account for the rising rate environment. While we observed CVNA raising APRs in the quarter, the persistence of the rate headwind weighs on our expectations. Our new Other GPU estimate for 3Q26 is $2,702 vs. our prior $2,739 (Street $2,732). Overall, our 3Q26 Adjusted EBITDA estimate rises to $786MM vs. $774MM prior and compares to the Street's $791MM."

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 $63.20 yesterday.

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