Carvana price target raised to $225 from $151 at Piper Sandler

Piper Sandler raised the firm’s price target on Carvana (CVNA) to $225 from $151 and keeps a Neutral rating on the shares. The firm notes Carvana is indicated higher by 20%, following Q3 results that easily topped PSC/consensus estimates. Piper is increasing its estimates to capture better-than-expected execution, particularly regarding margins. “Indisputably, we moved to Neutral prematurely,” the firm says. But in Piper’s view, the valuation now implies that Carvana will eventually max out its 3M unit/year reconditioning capacity, while perhaps exceeding the high-end of its EBITDA margin guidance range.