What Happened?
Shares of online used car dealer Carvana (NYSE: CVNA) jumped 1.7% in the afternoon session after Jefferies upgraded the stock to 'Buy' from 'Hold' and raised its price target. The analyst also increased the price target on the shares to $475 from $385. The upgrade was based on signs that Carvana could gain a larger share of the used-car market more quickly as shoppers shifted to online purchasing. Jefferies noted the company was well-positioned to lead in digital auto sales, helped by increased production capacity and faster delivery speeds. The firm's analysis, which included consumer surveys, also pointed to potential cost savings, expecting fixed costs per vehicle to fall over time, which would boost earnings.
After the initial pop the shares cooled down to $383.99, up 1.7% from previous close.
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What Is The Market Telling Us
Carvana’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 21 hours ago when the stock dropped 3.6% on the news that a steeper-than-anticipated drop in U.S. consumer confidence raised alarms about future consumer spending. The Conference Board reported its consumer confidence index fell to 94.2 in September, its lowest reading since April. The decline was attributed to growing pessimism among Americans regarding inflation and a weakening job market. This data is particularly concerning for companies reliant on discretionary spending, such as those in online retail, travel, and the gig economy, as reports suggest a bleak consumer outlook could curb spending on non-essential items and services. The survey's Expectations Index, a measure of short-term outlook, has remained below a key threshold that often signals a future recession, adding to investor concerns about the economic landscape.
Carvana is up 92.3% since the beginning of the year, and at $383.99 per share, it is trading close to its 52-week high of $392.66 from September 2025. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $1,612.
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