Here Is Where Option Traders Expect Carvana Stock to Be When It Joins the S&P 500 Index

Core Viewpoint - Carvana (CVNA) shares experienced a nearly 12% increase following the announcement of its inclusion in the S&P 500 Index on December 22, which is expected to enhance the stock's performance in the coming years [1][5]. Group 1: Stock Performance and Market Sentiment - Carvana's stock is currently trading at over 2.8 times its price from early April, indicating significant growth [2]. - Options traders are optimistic about Carvana, with expectations for the stock to reach over $550 by the first quarter of 2026, and a potential new all-time high of $487 by the time it joins the S&P 500 [3]. - The long-term relative strength index for Carvana is approximately 58, suggesting that upward momentum is still present as the new year approaches [4]. Group 2: Analyst Insights and Growth Projections - Bank of America analyst Michael McGovern predicts that Carvana will continue to rise in value as index-tracking funds increase their positions in the company [5]. - McGovern anticipates that Carvana will surpass CarMax in quarterly units sold by 2026 and maintain a compound annualized unit growth rate of about 20% through the end of the decade [6]. - Joining the S&P 500 may lower Carvana's cost of capital, reinforcing its potential as a long-term investment [6]. Group 3: Wall Street Recommendations - Wall Street remains generally bullish on Carvana for the next 12 months, with a consensus rating of "Strong Buy" [7]. - Price targets for Carvana stock reach as high as $500, indicating a potential upside of approximately 10% from current levels [8].