CarMax's (KMX) Underperform Rating Reaffirmed at BNP Paribas Exane

Key Points

• BNP Paribas Exane reaffirmed its “underperform” rating on CarMax and raised its price target from $33 to $48, implying about 19% downside from the prior close.
• CarMax reported a strong quarterly performance, with earnings of $1.16 per share versus the $0.73 consensus estimate and revenue of $7.88 billion, ahead of expectations.
• Analyst sentiment remains cautious overall: CarMax has an average “Reduce” rating and a $53.14 consensus price target, despite improving used-vehicle sales and potential share repurchases resuming.

CarMax (NYSE:KMX - Get Free Report)'s stock had its "underperform" rating reissued by stock analysts at BNP Paribas Exane in a research report issued to clients and investors on Wednesday, Benzinga reports. They presently have a $48.00 price target on the stock, up from their prior price target of $33.00. BNP Paribas Exane's price objective indicates a potential downside of 19.04% from the stock's previous close.

A number of other research analysts have also recently weighed in on KMX. Benchmark restated a "hold" rating on shares of CarMax in a report on Thursday, June 18th. Morgan Stanley increased their target price on shares of CarMax from $44.00 to $47.00 and gave the stock a "cautious" rating in a report on Wednesday, September 23rd. Wall Street Zen raised shares of CarMax from a "sell" rating to a "hold" rating in a research report on Saturday, June 13th. UBS Group set a $60.00 price target on shares of CarMax in a research note on Wednesday, July 29th. Finally, Robert W. Baird upped their price objective on CarMax from $48.00 to $55.00 and gave the stock an "outperform" rating in a research report on Thursday, June 18th. Two investment analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and four have assigned a Sell rating to the company's stock. According to data from MarketBeat, CarMax presently has an average rating of "Reduce" and an average price target of $53.14.

CarMax Price Performance

KMX opened at $59.29 on Wednesday. The stock's 50-day moving average price is $59.56 and its 200 day moving average price is $50.20. CarMax has a 12-month low of $30.26 and a 12-month high of $65.28. The firm has a market cap of $8.41 billion, a price-to-earnings ratio of 38.75, a PEG ratio of 1.80 and a beta of 1.17. The company has a current ratio of 2.70, a quick ratio of 0.82 and a debt-to-equity ratio of 2.87.

CarMax (NYSE:KMX - Get Free Report) last released its earnings results on Tuesday, September 29th. The company reported $1.16 earnings per share for the quarter, beating the consensus estimate of $0.73 by $0.43. The company had revenue of $7.88 billion during the quarter, compared to the consensus estimate of $7.09 billion. CarMax had a return on equity of 6.64% and a net margin of 0.84%. As a group, sell-side analysts expect that CarMax will post 2.73 earnings per share for the current year.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Global Retirement Partners LLC purchased a new stake in shares of CarMax in the 2nd quarter valued at approximately $29,000. Basecamp Wealth Advisors LLC lifted its position in shares of CarMax by 105.8% during the 1st quarter. Basecamp Wealth Advisors LLC now owns 636 shares of the company's stock worth $26,000 after purchasing an additional 327 shares during the last quarter. Huntington National Bank grew its stake in shares of CarMax by 62.4% during the fourth quarter. Huntington National Bank now owns 690 shares of the company's stock worth $27,000 after purchasing an additional 265 shares in the last quarter. Anchor Investment Management LLC acquired a new position in shares of CarMax during the second quarter worth $37,000. Finally, Wellington Grp LLC increased its holdings in CarMax by 6,500.0% in the first quarter. Wellington Grp LLC now owns 726 shares of the company's stock valued at $30,000 after buying an additional 715 shares during the last quarter.

More CarMax News

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Strong earnings and revenue beat: CarMax reported adjusted earnings of $1.16 per share, versus the roughly $0.73 consensus estimate and $0.64 a year earlier. Revenue rose 19.5% to $7.88 billion, exceeding expectations by approximately $850 million. CarMax Reports Second Quarter Fiscal 2027 Results
• Positive Sentiment: Used-vehicle demand improved: Combined retail and wholesale unit sales increased 14.7%, while retail used-unit sales rose 13.8% and comparable-store used-unit sales climbed 13.0%. Management said pricing actions helped support sales, and even lower-income customers appeared relatively resilient despite affordability pressures. CarMax Says Even Its Lowest-Income Customers Are Holding Up
• Positive Sentiment: Capital returns may resume: CarMax indicated that share repurchases are expected to restart in the third quarter, providing an additional potential catalyst for the stock. CarMax Just Gave Investors a Better Reason to Believe in the Turnaround

About CarMax

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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