CNBC’s Jim Cramer on Thursday advised Carvana shareholders to lock in gains after a big surge 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 said on “Mad Money.”
“Carvana’s [stock has] come roaring back lately, but this is the rare turbo-charged growth name that’s actually somewhat hostage to the broader economy,” he added.
The comments come one day after Carvana, an online used car marketplace, was the target of conflicting analyst recommendations.
In a note out Tuesday, investment bank Jefferies kept its buy rating and raised its price target on Carvana shares to $400 from $375. Jefferies cited a low supply of used cars across the industry and strong demand. Meanwhile, JPMorgan downgraded the stock to neutral from overweight, though it kept its price 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 apiece at the start of Covid-19 lockdowns in the U.S. last year.
“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 said.
“When you look closely at the Jefferies [data], it sure looks like April was better than May, which was 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.”
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