Citi raised its price target on Carvana Co. (NYSE:CVNA) to $25.00 from $11.00 with a Neutral rating. Carvana’s recently revised profitability outlook for Q2/23, driven by faster selling/securitizing of receivables, led to an expected adjusted EBITDA of $50 million.
The analysts believe that the company’s optimistic forecast, which led to significant share price gains, may be a temporary positive. Carvana stated that they had sold or securitized loans totaling around $2 billion in the current quarter, which exceeded the $1.3 billion amount recorded on May 4th, 2023. The company credited its robust performance in the first quarter of 2023 to its ongoing focus on improving operational efficiencies.