Sell Carvana as the company's current tailwinds aren't sustainable, Jefferies says

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Carvana stock could be poised for a 32% slump as profitability proves to be unsustainable, according to Jefferies.

Carvana stock may be getting ahead of itself, according to Jefferies. The firm downgraded shares of the secondary vehicle market stock to underperform from hold on Sunday. Jefferies also slashed its price target to $30 from $55, implying downside of nearly 32% from Friday's close. Carvana has been on fire this year with a nearly 830% jump.

mountain Carvana has surged nearly 830% in 2023. However, analyst John Colantuoni said Wall Street seems to be overestimating how long Carvana can sustain its recent higher profitability metrics, which merely reflect "transitory tailwinds that will abate in the coming quarters.

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