By Kit Norton

Bank of America downgraded Carvana on Monday, citing the recent spike in oil prices and its impact on lower- and middle-income consumers.

BofA analyst Michael McGovern downgraded Carvana to a Neutral rating, down from his previous Buy designation, and cut his price target to $360 from $400.

McGovern wrote that, entering the year, he was optimistic for an improving macro economic backdrop and a better interest rate environment, along with a possible increase in sales as consumers used tax refunds to buy cars. Those would all have been positives for Carvana and its used vehicle business.

Bank of America's view, however, has changed.

"With the recent oil shock potentially pressuring an already stretched lower & middle income consumer, and 2-year rates moving the opposite direction, we think the risk/reward profile is more balanced now than heading into 2026, despite management's strong execution & still-elevated growth," McGovern wrote.

Carvana stock ticked 0.2% higher to $314.37 on Monday. Meanwhile, CarMax advanced 1.5% to $41.85 on Monday as AutoNation fell 1.8% to $194.20.

Carvana rose 107.5% to $422.02 in 2025 but has come back to earth this year. As of the closing bell Thursday, ahead of the extended holiday weekend, Carvana had retreated 25.6% this year.

Write to Kit Norton at kit.norton@barrons.com

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(END) Dow Jones Newswires

April 06, 2026 11:16 ET (15:16 GMT)

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