Carvana Stock Continues Slide After Analyst Downgrade

CVNA is off by more than 84% in 2022

Deputy Editor
May 11, 2022 at 9:24 AM
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The shares of Carvana Co (NYSE:CVNA) are lower, last seen down 4.6% to trade at $35 in the premarket, after Stifel downgraded the stock to "hold" from "buy," and slashed its price target to $40 from $115. The brokerage firm cited several reasons  for the bear note, though its main source of concern is the company's plans to reduce its workforce, which implies "weaker demand will persist beyond the near-term." 

There's room for more analysts to join Stifel. Coming into today, 11 of the 20 covering brokerages called Carvana stock a "buy" or better, against nine "hold" ratings. What's more, the 12-month consensus price target of $137.30 is a massive 274.3% premium to last night's settlement, indicating further price-target cuts could be in the works.

On the flip side, options traders haven't shied away from airing their bearish attitude. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day put/call volume ratio of 1.69, which stands higher than 99% of readings from the past year. In other words, long puts have been much more popular than usual of late. 

On the charts, today's pullback is just another in a string of similar moves to multi-year lows. In fact, Carvana stock has finished lower in 10 of the last 12 sessions and, paired with six-straight monthly dips on the books, it should come as no surprise that the shares are trading at their lowest level since the broader market's March 2020 pullback. Year-to-date, CVNA carries an 84.2% deficit.  


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