CVNA - Carvana stock is viewed favorably at Morgan Stanley even with shorts piling in

2023-05-16 10:07:34 ET

Morgan Stanley stepped back into the Carvana Co. ( NYSE: CVNA ) ratings game with a new Equal-weight rating on the auto retailer.

Analyst Adam Jonas and team took a constructive view on the potential for Carvana ( CVNA ) to survive.

"With adequate capital and a now proven diligence around SG&A cost-cutting, CVNA is on track to re-establish an execution track-record and visibility with investors," updated the firm.

Notably, Carvana's ( CVNA ) liquidity is seen being sufficient for the company to continue its operations without the need to tap equity or debt raises in the very short term.

Carvana ( CVNA ) was noted to have left its lofty targets from a few years ago behind and adopt a "roll up your sleeves" approach that is seen being beneficial in creating an appropriate base from which the company can then grow. Jonas and team said they are still believers in the company's potential, although they warned on macroeconomic headwinds and the continued need for effective cost cutting execution.

Morgan Stanley assigned a price target of $12 on the highly-shorted stock.

Shares of Carvana ( CVNA ) fell 5.66% in early trading on Tuesday to $10.92 vs. the 52-week trading range of $3.55 to $58.05. Short interest on CVNA stands at more than 60% of total float adding to the volatile daily swings.

More on Carvana:

• Carvana: A Buy Ahead Of The Summer
• More articles from Seeking Alpha analysts
• Growth metrics on Carvana
• Carvana earnings call transcript
• Seeking Alpha's Quant Rating for Carvana

For further details see: