Carvana shares up as UBS initiates with 'buy", sees 20% upside

Shares of Carvana CVNA.N up 0.4% at $376.07 on Mon as UBS starts coverage with a 'buy' rating, citing used-car retailer's best-in-class e-commerce platform

UBS assigns a PT of $450, about 20% above stock's last close

"CVNA has a differentiated, best-in-class online platform and customer experience that positions them to gain share in the large but fragmented used vehicle market," UBS analyst Joseph Spak writes in note to clients

Spak says he expects EBITDA to continue to grow at a ~25% CAGR through the remainder of this decade, supporting a premium valuation

CVNA is only ~1.5% of the used vehicle sales market (~3% of used retail market), Spak says, but this could grow to ~4% by the end of the decade and ~8% over the next 10 years as the company heads toward its 3 mln used vehicle target

Spak's upside case PT of $554 is roughly 47% above current levels

Now, of 26 analysts covering CVNA, recommendation breakdown is 19 "strong buy" or "buy", 6 "hold" and 1 "sell"; median PT is $427.50, per LSEG data

With move on the session, shares up about 85% YTD