EV - The Reason for Today's Another 5% Drop In Carvana Stock
Carvana ( NYSE:CVNA )
Carvana ( NYSE:CVNA ) stock fell as high as 5.6% in premarket trading on Friday before recovering from being down 1.9% at 10:55 a.m. ET.
The drop in Carvana stock price seems to have caused two factors : backhanded praise from JMP Securities and a price target cut at JP Morgan.
What’s the Reason?
First, we’ll look at what JMP Securities has to say (not to be confused with JPM). For Friday morning, TheFly.com reported that JMP analyst Nicholas Jones had lowered his price objective on Carvana stock, but only to $45 per share, or three times its current price. According to Jones, Carvana might fall short of third-quarter sales projections by as much as 7% when it releases results at the beginning of next month. Despite this, Jones asserts that the “substantial upside” exists in Carvana’s low stock price and that the firm is unlikely to go bankrupt.
Yes, you’re right. The b-word was among the words he used.
When experts on Wall Street start talking about the likelihood of a firm going bankrupt, even negatively, it’s usually not a good indication. Many investors were undoubtedly frightened by JMP’s analyst emphasizing that Carvana won’t go bankrupt because he felt compelled to say so.
JP MorganR...
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