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Evercore ISI analyst Michael Montani raised the firm's price target on Carvana to $10 from $9 and keeps an In Line rating on the shares after Carvana pre-announced Q1 results and shared plans for a debt swap to help restructure the balance sheet. Should debtors take the restructuring terms, Carvana should benefit from around $100M in reduced annual interest expense, estimates the firm, which said its target hike reflects less EBITDA pressure and a potentially enhanced capital structure with a possibly reduced interest expense burden.

TD Cowen raised the firm's price target on Carvana to $8 from $7 and keeps a Market Perform rating on the shares. The analyst noted they announced a debt exchange offering for up to $1B in secured notes. If accepted the exchange could drive near-term interest expense lower.

JPMorgan analyst Rajat Gupta says that while Carvana's execution on costs helps cash burn in the near-term, de-scaling of business, with units down 25% year-over-year, 'continues to overshadow." The firm's EBITDA estimates move higher on the cost cuts, but it says this is still not enough to solve the company's "ongoing drain on liquidity and the increasing debt burden." The analyst's updated enterprise value, on slightly higher out-year EBITDA assumptions, continues to suggest little equity value. However, in the near-term, the stock will continue to trade on news around funding outcomes that could provide the company runway to showcase free cash flow profitability, which is likely only by 2026, contends JPMorgan. It keeps a Neutral rating on the shares.

Citi analyst Ronald Josey keeps a Neutral rating on Carvana with an $11 price target after the company announced plans to conduct a debt exchange offer for a portion of its debt that, if fully subscribed, would replace $1.3B of unsecured notes with $1B of secured debt while extending the repayment date on the earliest portion of its existing notes to 2028. Should the exchange be accepted, Carvana would lower its interest expense by $100M annually, providing the company with additional balance sheet flexibility, the analyst tells investors in a research note. Concurrently, Carvana released updated Q1 guidance ranges suggesting improving demand trends as the quarter progressed, says the firm. Citi is encouraged with Carvana's accelerating retail unit sales as the company makes progress towards its adjusted EBITDA breakeven plans, though it believes visibility remains limited.

Raymond James analyst Mitch Ingles reaffirms a Market Perform rating on shares of Carvana. The firm's thesis remains relatively unchanged after Carvana's business update, saying Carvana is navigating a difficult operating environment while also integrating 46 inspection centers from the ADESA acquisition, the analyst tells investors in a research note. Raymond James believes Carvana has a long runway for growth in the coming years, but sees a more favorable entry point likely a few quarters away if it can show sustainable EBITDA margin progress.