SFT - Cantor Fitzgerald downgrades Shift Technologies on used auto pricing concerns

Cantor Fitzgerald analyst Brett Knoblauch cut his rating on Shift Technologies to “Neutral” from a prior “Buy” amid concerns on used vehicle price trends and the integration of its planned CarLotz merger.

Knoblauch pointed to the Manheim used vehicle value index’s decline from 219.9 at the end of June 2022 to 205.9 at the end of September as a key concern. As he expects supply chain issues are easing, this trend is likely to continue and exacerbate issues for Shift Technologies ( NASDAQ: SFT ).

“Our decision to downgrade SFT shares is based on a combination of used vehicle prices declining at a quicker rate than we previously expected, which results in us further lowering our estimates after a meaningful cut at 2Q22 results, higher auto rates negatively impacting car affordability and thus lowering used vehicle sale volume, uncertainty surrounding Shift's planned merger with CarLotz and how the business will look on a pro forma basis, and uncertainty pertaining to Shift's ability to reach positive FCF,” he added, summarizing the motivating factors.

Alongside the downgrade, Knoblauch moved his price target on shares to $0.90 from $2.50. Shares of Shift Technologies ( SFT ) rose 4.35% in premarket trading despite the downgrade.

Read more on used auto pricing trends .

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