Expect more trouble ahead for Carvana , JPMorgan Chase says. Analyst Rajat Gupta slashed the bank’s price target on the used-vehicle seller to $10 from $20 a share, citing the company’s mounting net debt and ongoing volume pressures. “Net-net, chance of survivability is not a reason to engage in shares currently, and we believe CVNA is far from out of the woods, as even when the industry bottoms out, we don’t see a V-shaped recovery in the industry, particularly given challenging supply dynamics in the medium term for 1-5-year-old cars and negative equity risk, along with CVNA’s increasing debt burden,” Gupta wrote in a note to clients Tuesday. To be sure, JPMorgan views a downturn scenario where Carvana can ride out the headwinds. But the company’s rising net debt and “direction of fundamentals” is not enough to support the current price target, Gupta wrote. “We do think fundamental risks are better understood, and the downside case is playing out, with hopes pinned on macro recovery and a Fed pivot,” he wrote. Carvana’s stock tumbled Monday for the second consecutive trading day after the company posted earnings that fell short of Wall Street’s expectations as the outlook for used vehicles weakens from record demand when Covid-19 disrupted new vehicle supply chains. “While we believe Carvana’s business model is more scalable, with room for continued share gains in the highly fragmented used market, we believe rising rates and continued labor/ capacity constraints and a recent pause in investments to manage profitability mean volume growth is likely to slow, with valuation, despite the recent de-rating, still relatively rich,” Gupta said. JPMorgan’s new price target means shares could rally 35% from Monday’s close. The stock has plummeted nearly 97% this year. — CNBC’s Michael Bloom contributed reporting