Wedbush now has more conviction when it comes to Carvana going forward. The investment firm upgraded the online used-car dealership to an outperform rating from neutral. Analyst Scott Devitt also raised his 12-month price target to $400 from $380, implying a gain of about 29% from Friday's close. While shares of Carvana have surged 52% this year, Devitt pointed to its 13% sell-off in the last month as a catalyst for the stock. He attributed this reaction mainly to "underwhelming near-term performance" from CarMax, its "closest peer," alongside broader rising concerns within the credit markets. CVNA YTD mountain CVNA YTD chart "We believe the recent pullback in shares is overdone, and investors should take advantage of this period of relative weakness," he wrote. "We think the risk/reward is compelling, with our valuation and analysis implying limited downside from here." Devitt wrote that Carvana's management has demonstrated an ability to deliver robust growth in recent quarters. Momentum has recently shifted more favorably towards Carvana, and the analyst now believes the company will achieve a leading market position by unit volume in the fourth quarter of 2026. He also believes that Carvana will achieve 3 million in annual retail unit sales by 2033. He sees this sustainable growth stemming from both operational and technology-driven improvements the company has made recently. The analyst added that Carvana seems relatively shielded from ongoing credit concerns. "Carvana's ability to maintain a relatively healthy credit performance versus expectations while continuing to expand its offering into lower-tier financing," he wrote. "While we see little cause for concern, investor sentiment has been tethered to the broader market and underperformance of peers."
