TLDR
- Bank of America downgraded Carvana (CVNA) from Buy to Neutral, cutting its price target from $400 to $360
- Analyst Michael McGovern cited oil price spikes and rising 2-year interest rates as key concerns
- Lower- and middle-income consumers — Carvana’s core buyers — are feeling the squeeze
- Gordon Haskett sees Q1 revenue trending toward an upside surprise, but flags a deceleration in unit growth in March
- Carvana surged 107.5% in 2025 but has pulled back 25.6% year-to-date heading into this week
Carvana had one of the best runs on the market in 2025, gaining over 100% to close the year at $422.02. But 2026 has been a different story, and now Wall Street is starting to adjust its view.
Bank of America analyst Michael McGovern downgraded CVNA from Buy to Neutral on Monday and trimmed his price target to $360 from $400. The move reflects a shift in his macro outlook rather than a knock on Carvana’s operations.
McGovern came into 2026 expecting a friendlier interest rate environment and a boost from tax refund season. Neither has played out as hoped.
Instead, a recent spike in oil prices is putting pressure on the lower- and middle-income consumers that make up a large chunk of Carvana’s customer base. Two-year interest rates have also moved in the wrong direction, which could squeeze Carvana’s financing margins.
Tax refund season, usually a tailwind for used car sales, isn’t delivering the same lift this year. Data suggests more consumers are using refunds to pay down debt rather than buy cars — a quiet but meaningful shift in behavior.
McGovern acknowledged Carvana’s management has executed well and that long-term growth potential remains. But he said the risk/reward balance looks more even now than it did heading into the year.
Q1 Could Still Beat — With a Catch
Not everyone is turning bearish. Gordon Haskett analyst Robert Mollins, who runs daily web scraping of Carvana’s retail inventory, says Q1 revenue is tracking toward an upside surprise.
The beat is being driven by both vehicle units and average selling prices. But Mollins flagged that the outperformance gap has narrowed compared to earlier in the quarter.
More importantly, unit growth in March slowed noticeably versus earlier months. Growth was still positive — just not at the pace investors had been watching.
Gordon Haskett holds a Hold rating on CVNA with a $335 price target, below Monday’s opening levels.
Wall Street is forecasting Q1 revenue of $6.01 billion, which would represent 42% growth year-over-year, per FactSet. Adjusted EPS is expected at $1.53. Carvana reports on April 29.
Where Analysts Stand
Despite the BofA downgrade, the broader analyst community remains constructive. CVNA carries a Strong Buy consensus based on 13 Buy ratings, four Holds, and zero Sells over the past three months.
The average price target sits at $443.38, implying roughly 41.5% upside from current levels.
CarMax (KMX) rose 2% to $42.13 on Monday, while AutoNation fell 2.4% to $193.04.
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