CNBC’s Jim Cramer on Thursday recommended Carvana investors to secure gains after a huge rise in the stock.
“I still think Carvana’s a great long-term story, and I’d never recommend shorting the stock. But if you’ve owned it for this terrific run, maybe … take some off the table as used car sales are showing signs of slowing in price increases,” he stated on “Mad Money.”
“Carvana’s [stock has] come roaring back recently, however this is the unusual turbo-charged development name that’s really rather captive to the wider economy,” he included.
The remarks come one day after Carvana, an online utilized automobile market, was the target of clashing expert suggestions.
In a note out Tuesday, financial investment bank Jefferies kept its buy ranking and raised its rate target on Carvana shares to $400 from $375. Jefferies mentioned a low supply of utilized automobiles throughout the market and strong need. Meanwhile, JPMorgan reduced the stock to neutral from obese, though it kept its rate target at $325 per share.
Carvana’s stock closed at $304.51 on Thursday, up 43% from a 2021 low of $219.40 in May. Shares peaked at $323.39 after rallying from less than $30 each at the start of Covid-19 lockdowns in the U.S. in 2015.
“I’m leaning toward JP Morgan’s suddenly more bearish perspective in part because it seems more forward-looking than the more bullish analysis from Jefferies,” Cramer stated.
“When you look carefully at the Jefferies [data], it sure appear like April was much better than May, which was much better than June,” he continued. “That’s called cadence, and the cadence of the quarter is going in the wrong direction. That jives with what I’ve heard from the rest of the industry.”
