JP Morgan Defends Carvana (CVNA) Against Hindenburg Research Short Report
JP Morgan maintains an 'Overweight' rating on Carvana (CVNA) despite a scathing short report from Hindenburg Research, stating their analysis found no
Hindenburg Research, known for its short-selling reports, has released a critical analysis of Carvana (CVNA), the online used car retailer. However, JP Morgan, a major Wall Street firm, has unexpectedly come to Carvana's defense, maintaining an 'Overweight' rating on the company's stock. Hindenburg Research's Allegations Hindenburg Research's report, titled "Carvana—A Father-Son Accounting Grift For The Ages," raises concerns about Carvana's business model, including: Overvaluation: Carvana is trading at a significantly higher sales and earnings multiple compared to its peers. Loan Sales: Carvana sells repackaged car loans, with concerns about a related-party buyer after a deal with Ally Financial ended. Subprime Loans: Carvana's loan book is heavily weighted towards non-prime and subprime borrower loans, potentially due to lax underwriting standards. Related-Party Accounting: Carvana's financials are allegedly propped up through various related…