Updates stock activity, adds analyst commentary

** Carvana's CVNA.N shares up 5% premarket to $198.22 after RBC upgraded used-car retailer to 'outperform' from 'sector perform'

** Brokerage boosts PT by $10 to $280, implying 48% upside to stock's Mon close

** "After CVNA's remarkable turnaround last year, we see the controversial pullback as an opportunity," RBC analyst team led by Brad Erickson wrote in note

** Co's retail unit sales could exceed expectations, especially as vehicle supply improves, Erickson said, adding he believes GPU (gross profit/unit) levels are more durable than feared

** He also expects balance sheet improvement by co and clearer path to sustainable free cash flow generation

** CVNA's supply constrained supply business model and underpenetrated total addressable market $(TAM.UK)$, could "create an unexpected compounder over time," Erickson said

** On Fri, CVNA shares closed down 11%, a day after Hindenburg Research revealed a short position and accused co of insider trading and accounting manipulation

** On Mon, stock snapped five-session losing streak ending session up nearly 7% after CVNA said in a filing it reestablished an agreement with Ally Financial ALLY.N to sell up to $4 bln in automotive finance receivables over the next year

** Avg rating among 24 analysts covering CVNA is "buy" and their median PT is $250, per LSEG

** Through Mon, stock off 7% to start 2025. Shares ended 2023 at $52.94 after finishing 2022 at $4.74

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))