Why Carvana Stock Dropped by More Than 5% This Morning
Shares of used car "vending machine" company Carvana (NYSE: CVNA) dropped by as much as 5.6% in early trading Friday before retracing to about a 1.9% decline as of 10:55 a.m. ET.
A backhanded compliment from JMP Securities and a price target reduction at JP Morgan appear to be the reasons for the decline.
Let's start with the news from JMP Securities (not to be confused with JPM). In a note covered on TheFly.com Friday morning, JMP's Nicholas Jones cut his price target on Carvana -- but only to $45 a share, which is still three times what the stock goes for now. As Jones explained, Carvana is likely to miss its revenue estimates by as much as 7% when it reports its third-quarter numbers early next month. Nevertheless, said Jones, there is "material upside" in Carvana's current depressed stock price, and the company is unlikely to go bankrupt.
Source Fool.com
