Stephens Downgrades CarMax (NYSE:KMX) to Equal Weight

Key Points

• Stephens downgraded CarMax from an "overweight" rating to an "equal weight" rating, with a target price of $42.00, indicating a potential downside of 10.37% from the stock's previous close.
• CarMax reported disappointing quarterly results, with earnings per share of $0.64, missing analysts' estimates of $1.03, and revenue of $6.59 billion, below the expected $7.07 billion.
• Despite recent downgrades, CarMax has a consensus rating of "Hold" from analysts, with a mix of ratings, including one Strong Buy, five Buy, and three Sell ratings.

CarMax (NYSE:KMX - Get Free Report) was downgraded by research analysts at Stephens from an "overweight" rating to an "equal weight" rating in a research note issued to investors on Tuesday,Finviz reports. They presently have a $42.00 price objective on the stock. Stephens' target price points to a potential downside of 10.37% from the stock's previous close.

Other research analysts have also issued reports about the stock. JPMorgan Chase & Co. reduced their target price on shares of CarMax from $65.00 to $50.00 and set a "neutral" rating on the stock in a report on Friday, September 26th. Benchmark initiated coverage on shares of CarMax in a research report on Thursday, July 17th. They issued a "buy" rating and a $75.00 price objective for the company. Zacks Research lowered shares of CarMax from a "hold" rating to a "strong sell" rating in a research report on Thursday, October 2nd. Morgan Stanley lowered their target price on shares of CarMax from $80.00 to $56.00 and set an "overweight" rating for the company in a research note on Wednesday, October 1st. Finally, Mizuho reduced their price target on CarMax from $80.00 to $78.00 and set a "neutral" rating on the stock in a research note on Thursday, July 3rd. One analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, eight have given a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and an average target price of $55.67.

CarMax Price Performance

KMX stock opened at $46.86 on Tuesday. The stock's 50 day moving average price is $56.72 and its 200 day moving average price is $63.67. The firm has a market cap of $6.88 billion, a P/E ratio of 13.74, a PEG ratio of 0.87 and a beta of 1.27. The company has a debt-to-equity ratio of 2.87, a quick ratio of 1.06 and a current ratio of 2.46. CarMax has a 1 year low of $42.75 and a 1 year high of $91.25.

CarMax (NYSE:KMX - Get Free Report) last released its quarterly earnings results on Thursday, September 25th. The company reported $0.64 earnings per share for the quarter, missing analysts' consensus estimates of $1.03 by ($0.39). CarMax had a return on equity of 8.51% and a net margin of 1.98%.The company had revenue of $6.59 billion during the quarter, compared to analyst estimates of $7.07 billion. During the same period last year, the firm earned $0.85 earnings per share. The business's revenue was down 6.0% compared to the same quarter last year. On average, sell-side analysts expect that CarMax will post 3.23 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the stock. HF Advisory Group LLC grew its stake in shares of CarMax by 30.8% in the third quarter. HF Advisory Group LLC now owns 36,308 shares of the company's stock valued at $1,629,000 after buying an additional 8,545 shares in the last quarter. Texas Permanent School Fund Corp grew its position in CarMax by 59.5% in the second quarter. Texas Permanent School Fund Corp now owns 27,488 shares of the company's stock valued at $1,847,000 after acquiring an additional 10,259 shares in the last quarter. Osaic Holdings Inc. raised its stake in shares of CarMax by 49.0% during the second quarter. Osaic Holdings Inc. now owns 159,895 shares of the company's stock valued at $10,768,000 after purchasing an additional 52,576 shares during the period. Orion Porfolio Solutions LLC lifted its position in shares of CarMax by 14.4% during the second quarter. Orion Porfolio Solutions LLC now owns 24,411 shares of the company's stock worth $1,641,000 after purchasing an additional 3,070 shares in the last quarter. Finally, Thrivent Financial for Lutherans boosted its stake in shares of CarMax by 202.1% in the second quarter. Thrivent Financial for Lutherans now owns 26,230 shares of the company's stock valued at $1,762,000 after purchasing an additional 17,548 shares during the period.

About CarMax

CarMax, Inc, through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services.

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