JPMorgan Chase & Co. Forecasts Strong Price Appreciation for CarMax (NYSE:KMX) Stock

Key Points

• JPMorgan Chase raised its price target on CarMax from $28 to $35 but kept an "underweight" rating, implying roughly a 13.6% downside from the prior close.
• CarMax's adjusted Q4 results beat expectations (EPS $0.34; revenue $5.95B), but a GAAP loss from a goodwill impairment and margin compression after used‑car price cuts hurt sentiment and pressured the stock.
• Analyst views are mixed—MarketBeat shows a consensus "Reduce" with an average target of $41.36—while management is pushing a tech/SG&A turnaround and some institutions have recently increased their stakes.

CarMax (NYSE:KMX - Get Free Report) had its price objective increased by JPMorgan Chase & Co. from $28.00 to $35.00 in a report issued on Wednesday,Benzinga reports. The firm currently has an "underweight" rating on the stock. JPMorgan Chase & Co.'s target price would indicate a potential downside of 13.55% from the stock's previous close.

Other equities analysts have also issued reports about the company. Robert W. Baird increased their price objective on CarMax from $44.00 to $48.00 and gave the company an "outperform" rating in a report on Wednesday, February 18th. Benchmark reissued a "hold" rating on shares of CarMax in a report on Tuesday, December 16th. Truist Financial increased their price objective on CarMax from $35.00 to $37.00 and gave the company a "hold" rating in a report on Thursday, December 18th. Weiss Ratings reissued a "sell (d)" rating on shares of CarMax in a report on Wednesday, April 8th. Finally, Wedbush reduced their price objective on shares of CarMax from $40.00 to $36.00 and set a "neutral" rating for the company in a research note on Friday, December 19th. One analyst has rated the stock with a Buy rating, twelve have given a Hold rating and five have assigned a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Reduce" and a consensus target price of $41.36.

CarMax Stock Down 2.8%

Shares of KMX stock traded down $1.17 on Wednesday, reaching $40.49. 2,924,660 shares of the company were exchanged, compared to its average volume of 3,532,841. The company has a market cap of $5.74 billion, a price-to-earnings ratio of 13.38, a PEG ratio of 1.29 and a beta of 1.30. The company has a 50-day moving average of $43.00 and a 200-day moving average of $41.98. The company has a debt-to-equity ratio of 2.74, a current ratio of 1.99 and a quick ratio of 0.51. CarMax has a one year low of $30.26 and a one year high of $71.99.

CarMax (NYSE:KMX - Get Free Report) last announced its quarterly earnings results on Tuesday, April 14th. The company reported $0.34 earnings per share for the quarter, beating the consensus estimate of $0.22 by $0.12. CarMax had a net margin of 1.77% and a return on equity of 7.72%. The business had revenue of $5.95 billion for the quarter, compared to analysts' expectations of $5.65 billion. During the same quarter last year, the firm earned $0.58 EPS. The firm's revenue for the quarter was down 1.0% compared to the same quarter last year. Analysts anticipate that CarMax will post 3.23 earnings per share for the current year.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Silver Heights Capital Management Inc raised its stake in shares of CarMax by 39.5% during the third quarter. Silver Heights Capital Management Inc now owns 926,167 shares of the company's stock valued at $41,557,000 after acquiring an additional 262,478 shares during the last quarter. Intech Investment Management LLC raised its stake in CarMax by 129.4% in the third quarter. Intech Investment Management LLC now owns 86,444 shares of the company's stock worth $3,879,000 after buying an additional 48,757 shares in the last quarter. True North Advisors LLC raised its stake in CarMax by 66.6% in the third quarter. True North Advisors LLC now owns 123,742 shares of the company's stock worth $5,552,000 after buying an additional 49,450 shares in the last quarter. Dimensional Fund Advisors LP raised its stake in CarMax by 33.2% in the third quarter. Dimensional Fund Advisors LP now owns 3,685,201 shares of the company's stock worth $165,358,000 after buying an additional 918,553 shares in the last quarter. Finally, Rings Capital Management LLC raised its stake in CarMax by 71.6% in the third quarter. Rings Capital Management LLC now owns 1,074,000 shares of the company's stock worth $48,190,000 after buying an additional 448,000 shares in the last quarter.

Key Stories Impacting CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Adjusted Q4 results topped estimates — CarMax reported adjusted EPS of $0.34 vs. Street $0.22 and revenue of $5.95B vs. $5.65B, showing demand and top-line resilience despite weak year‑over‑year comparisons. Article Title
• Positive Sentiment: Management is pursuing a turnaround — new CEO Keith Barr is prioritizing technology and process changes to streamline buying/selling and target SG&A reductions, which could help margins over time. Article Title
• Neutral Sentiment: Analysts mixed — some firms (Needham) maintained a Hold citing early signs of volume improvement but limited visibility on a durable earnings recovery; this keeps near‑term investor expectations varied. Article Title
• Negative Sentiment: GAAP loss and nonrecurring charges weighed on sentiment — the quarter included a goodwill impairment and other items that produced a GAAP loss, undermining the headline print despite the adjusted beat. Article Title
• Negative Sentiment: Margin compression from price cuts — management cut used‑car prices to stimulate demand, which reduced gross profit per retail unit and led to margin deterioration that investors punished. Article Title
• Negative Sentiment: Credit provisioning and operating pressures — higher loan‑loss reserves and weaker gross profit in retail/wholesale flagged a near‑term earnings headwind. Article Title
• Negative Sentiment: Analyst downgrades and price target cuts — Bank of America initiated coverage with an Underperform/Sell and $40 target (below recent levels), adding pressure to the stock amid uncertain near‑term profitability. Article Title
• Negative Sentiment: Market reaction: sharp intraday declines — coverage and headlines on the loss, price cuts and margin squeeze triggered large share‑price drops as investors weighed recovery timing. Article Title

About CarMax

CarMax NYSE: KMX is a leading retailer of used vehicles in the United States, offering customers a streamlined, no-haggle purchasing experience. The company's inventory spans a broad range of makes and models, each of which undergoes a comprehensive inspection process before being offered for sale. Customers can shop in person at CarMax's retail locations or browse the company's online platform, which provides detailed vehicle histories, virtual tours and contactless purchasing options.

Originally launched in 1993 as a division of Circuit City, CarMax became an independent, publicly traded company in 1997.

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