Carvana gets stock upgrade from Morgan Stanley analysts

Carvana $CVNA ( ▲ 0.23% ) just got a fresh wave of investor confidence—this time from Morgan Stanley. 

The details: The analysts boosted Carvana’s stock rating to “overweight” from “equal-weight”—and raised Carvana’s price target to $280 from $260, suggesting more than 25% upside from Tuesday's intraday level.

• Carvana shares are up by more than 140% in value in the last 12 months ($221.66 at press time), a distant memory from 2022 when the company’s stock was trading at $5. 

Between the lines: Morgan Stanley’s optimism is fueled by what it sees as “a strong case for the company to have proven profitable growth more than just a temporary phenomenon," says Morgan Stanley.

• Carvana recently reported fourth-quarter earnings per share (EPS) of $0.56, substantially higher than some early EPS estimates of $0.32. 

• Carvana sold 114,379 retail units for Q4, a 50% increase year-over-year, with revenue soaring 46% to $3.55 billion.

• The used car company also expects significant growth in both retail units sold and adjusted EBITDA in 2025.  

Worth noting: Investor optimism around Carvana has also been heightened by the company’s business 2024 expansion strategy, which included opening three major facilities devoted to auctioning reconditioned vehicles, including one in Kansas City, another in Houston, and the third in Las Vegas. 

Bottom line: Carvana’s comeback has impressed investors—but staying on top will depend on consistent execution in a still-volatile used car market.

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