By Sam Boughedda

Investing.com — Shares of online used car retailer Carvana Co (NYSE:CVNA) are up over 1% after Morgan Stanley (NYSE:MS) released a note reiterating its orverweight rating and $430 price target on the stock

Since August, Carvana shares have suffered a significant pullback from intraday highs of $376.83 to around $130.

However, Morgan Stanley analyst Adam Jonas said that Carvana has been "one of the most popular stocks to discuss" recently after speaking with various clients.

"Many of the conversations are of the 'sharpening the pencil' type as some see an entry point here after missing the rally through 2020 and 2021 or never owning the stock at all," Jonas explained.

"Other conversations share serious concerns around rising inventory, slowing sales, unsustainably high used prices, increased competition and liquidity concerns. We think today's share price offers a highly compelling risk reward and we reiterate our OW rating," he added.

The analyst concluded by stating that he sees Carvana shares at under $140 as a better risk/reward than when the stock was at $40 two years ago because it is solidifying its competitive advantage and remaining the "apex predator in auto retail."

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