CarMax (NYSE:KMX) Stock Moved Up to "Buy" by Bank of America

Key Points

• Bank of America upgraded CarMax to “Buy” from “Underperform” and set a $65 price target, implying 30.61% upside from the reported price.
• CarMax reported quarterly EPS of $1.16, beating estimates of $0.73, while revenue reached $7.88 billion and increased 19.5% year over year.
• Despite the upgrade, analyst sentiment remains cautious: the consensus rating is “Hold,” with 14 Hold, three Buy, and two Sell ratings and an average price target of $57.85.

CarMax (NYSE:KMX - Get Free Report) was upgraded by equities researchers at Bank of America from an "underperform" rating to a "buy" rating in a note issued to investors on Thursday, MarketBeat Ratings reports. The firm presently has a $65.00 price objective on the stock. Bank of America's price objective suggests a potential upside of 30.61% from the company's current price.

KMX has been the subject of a number of other research reports. UBS Group set a $65.00 price objective on shares of CarMax in a research note on Thursday. Robert W. Baird raised their price objective on shares of CarMax from $64.00 to $70.00 and gave the stock an "outperform" rating in a report on Wednesday, September 30th. Morgan Stanley lifted their target price on shares of CarMax from $47.00 to $53.00 and gave the company an "equal weight" rating in a research report on Wednesday, September 30th. Barclays lifted their target price on shares of CarMax from $61.00 to $67.00 and gave the company an "equal weight" rating in a research report on Wednesday, September 30th. Finally, Benchmark reissued a "hold" rating on shares of CarMax in a research note on Thursday, June 18th. Three analysts have rated the stock with a Buy rating, fourteen have assigned a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus price target of $57.85.

CarMax Stock Down 2.1%

KMX opened at $49.77 on Thursday. CarMax has a 1-year low of $30.26 and a 1-year high of $65.28. The company has a current ratio of 2.33, a quick ratio of 0.57 and a debt-to-equity ratio of 2.66. The stock has a market capitalization of $7.06 billion, a price-to-earnings ratio of 24.28, a P/E/G ratio of 1.47 and a beta of 1.23. The business has a 50 day moving average of $58.53 and a 200-day moving average of $51.08.

CarMax (NYSE:KMX - Get Free Report) last announced its quarterly earnings data on Tuesday, September 29th. The company reported $1.16 EPS for the quarter, beating analysts' consensus estimates of $0.73 by $0.43. The business had revenue of $7.88 billion during the quarter, compared to analyst estimates of $7.09 billion. CarMax had a net margin of 1.06% and a return on equity of 7.76%. The firm's revenue for the quarter was up 19.5% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.64 earnings per share. As a group, sell-side analysts anticipate that CarMax will post 3.01 earnings per share for the current year.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Bessemer Group Inc. raised its position in CarMax by 28.1% in the 1st quarter. Bessemer Group Inc. now owns 156,121 shares of the company's stock valued at $6,491,000 after purchasing an additional 34,211 shares during the last quarter. State Street Corp boosted its stake in CarMax by 5.6% in the second quarter. State Street Corp now owns 5,156,276 shares of the company's stock worth $272,715,000 after purchasing an additional 271,216 shares in the last quarter. Bank of America Corp DE grew its holdings in shares of CarMax by 61.7% during the first quarter. Bank of America Corp DE now owns 1,687,359 shares of the company's stock worth $70,160,000 after purchasing an additional 643,834 shares during the last quarter. WINTON GROUP Ltd grew its holdings in shares of CarMax by 181.0% during the second quarter. WINTON GROUP Ltd now owns 38,780 shares of the company's stock worth $2,051,000 after purchasing an additional 24,977 shares during the last quarter. Finally, Convergence Investment Partners LLC bought a new stake in shares of CarMax during the first quarter worth $1,688,000.

Trending Headlines about CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Zacks sharply raised its long-term CarMax earnings forecasts. FY2027 EPS was lifted to $3.39 from $2.54, FY2028 to $3.68 from $2.71, and FY2029 to $4.25 from $2.91. The revisions imply improving profitability expectations well beyond the current-year consensus of $3.01 per share.
• Positive Sentiment: Quarterly estimates were also increased across the forecast period, including Q3 2027 EPS to $0.44 from $0.40, Q4 2027 to $0.49 from $0.27, Q1 2028 to $1.21 from $0.95, Q2 2028 to $1.08 from $0.83, Q3 2028 to $0.87 from $0.68, Q4 2028 to $0.52 from $0.25, Q1 2029 to $1.10 from $0.81, and Q2 2029 to $1.16 from $0.73.
• Neutral Sentiment: Despite the higher earnings outlook and Strong Buy ranking, Zacks Research retained a Hold rating in its estimate updates. This mixed message could limit the upside from the revisions.

CarMax Company Profile

CarMax, Inc is a retailer of used vehicles operating in the United States. The company sells a broad selection of used cars, trucks and SUVs through its dealership network and online platform, offering customers the ability to research, purchase and arrange delivery for vehicles through an omnichannel shopping experience.

In addition to retail vehicle sales, CarMax provides vehicle financing through CarMax Auto Finance and offers customers access to extended protection products and related services.

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