Carvana upgraded to Neutral at Wedbush after debt exchange

As previously reported, Wedbush upgraded Carvana to Neutral from Underperform with a price target of $48, up from $40. The recently completed debt exchange and improving profitability could drive upside in Q3 and Q4, as well as “give the company at least two years of breathing room to execute,” the analyst tells investors. The company is benefitting from more favorable industry pricing conditions, loan sales that are on pace to “greatly exceed originations,” and favorable pricing in the ABS market, while Carvana also has made “significant progress” on initiatives that should contribute to sustainably higher retail gross profit per unit, the analyst added.