Stocks to watch after December’s CPI report: CARS, CVNA, TSN

The December CPI report showed that inflation is stable but not necessarily improving in the way markets and the Federal Reserve would prefer. However, when excluding volatile food and energy categories, core consumer prices rose at the slowest pace since March 2021, with a 0.2% monthly rise and a 2.6% annual increase.

When including all categories, the CPI rose 0.3% over the past month and 2.7% annually, with food prices in particular rising, recording a monthly rise of 0.7% and a 3.1% annual increase. Although inflation remained above the Fed’s preferred target of 2%, the core CPI slowed more than most economists expected.

However, here are two interesting stocks following the December CPI report, and others that may need to be avoided for now.

Image source: US Bureau of Labor Statistics

Cars.com and Carvana could benefit from lower used car prices

Although used car and truck prices remained up 1.6% over the past year, they saw the largest decline among all items, except food and energy, with an unadjusted monthly decline of 1.7% and a monthly decline of 1.1% on a seasonally adjusted basis. Considering that this may attract more buyers to the used car market, Cars.com (CARS – Free Report) And Carvana (CVNA – Free Report) They could benefit as two of the largest online marketplaces for used cars in the United States

Cars.com stock has an attractive price of $12 per share and a cheap forward earnings multiple of just 5X. Cars.com shares are beginning to prove undervalued, and currently have a Zacks Rank of #3 (Hold).

Leadership changes and insider selling have put pressure on Cars.com stock, and while investor uncertainty remains high, CARS could be set up for a nice rebound if the company starts hitting its interesting EPS targets. To this point, Cars.com’s earnings per share are expected to jump another 33% in fiscal 2026 to $2.35, but it was vulnerable to missing quarterly earnings expectations, although the risk versus reward is attractive.

*Cars.com will report fourth-quarter 2025 results on Thursday, February 26^y.

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Carvana, on the other hand, has been more consistent in achieving lofty growth goals as its self-described “fastest-growing used car retailer.” Carvana has become one of the leading platforms for buying and selling cars, and its stock has risen an impressive +6,000% in the past three years.

At over $450 per share and 64 times forward earnings, CVNA is far from cheap but it does justify a premium with FY25 EPS now expected to reach $5.49, up 245% from $1.59 in 2024. Furthermore, FY26 EPS is expected to jump another 33% to $7.31.

It’s also worth noting that Carvana’s PEG ratio is close to 1X, with a tick at or below that level, suggesting that the stock may be undervalued when considering its long-term growth rate as the denominator of its P/E ratio. CVNA has a Zacks Rank #3 (Hold) after rising another +30% in the past three months.

*Carvana is scheduled to report fourth-quarter 2025 results on Wednesday, February 18^y.

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December’s CPI highlights Tyson Foods’ struggles

It is worth noting that the prices of meat, poultry and fish rose by approximately 7% year-on-year, due to a 16% rise in the costs of beef and veal, which rose by 1% month-on-month. The decline in the price of livestock has pushed the price of ground beef to $7 per pound, and higher food prices do not automatically translate into higher profits for packaged food companies or meat processors.

To this point, Tyson Foods ( TSN – Free Report ) is a prime example where the meat producer has been suffering deeper losses in the beef sector due to severe cattle shortages and escalating input costs. When livestock supplies are limited, Tyson pays more for livestock, but it cannot fully pass these costs on to consumers.

This could ultimately lead to better long-term buying opportunities once Tyson gets past the beef shortage, but TSN is currently sporting a Zacks Rank #4 (Sell) as EPS revisions could trend lower and actually fell modestly during Q4 FY26 and FY27 EPS estimates fell again in the last 60 days.

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