Carvana hits brakes as Jefferies, Needham highlight rocky outlook

Vroom

09/12/2022 11:39

(Updates)
    ** Shares of used-car retailer Carvana Co  CVNA.N  fall 10%
to $4.46 premarket, a day after jumping nearly 30%
    ** Jefferies halves PT to $5 on potential Carvana
restructuring and continued soft demand due to worsening
affordability on rising rates and elevated prices
    ** Brokerage sees demand under pressure until prices decline
enough to offset the impact on affordability from rising rates;
also cuts PT for online used-car seller Vroom  VRM.O 
    ** Carvana shares rebounded in the previous session after
sinking to a new low on Wednesday on a Bloomberg report stating
the co was speaking with lawyers and investment bankers about
options for managing its debt load
    ** Needham downgrades CVNA to "hold" from "buy", citing low
confidence in the company's turnaround plans and says it doesn't
see a long-term solution
        ** "It's possible the market is implying a near-term
bankruptcy filing," Needham says, pointing to an about 26%
decline in CVNA shares over the past two sessions 
    ** YTD, Carvana stock down 97.8% vs a 10.3% decline in the
NYSE composite  .NYA 
 (Reporting by Priyamvada C and Amruta Khandekar in Bengaluru)
 ((Priyamvada.c@thomsonreuters.com))