CarMax’s (KMX) “Strong Sell” Rating Reaffirmed at BNP Paribas Exane

CarMax (NYSE:KMX)‘s stock had its “strong sell” rating reissued by BNP Paribas Exane in a note issued to investors on Wednesday, Marketbeat reports. They currently have a $48.00 target price on the stock, up from their prior target price of $33.00. BNP Paribas Exane’s price objective would suggest a potential downside of 13.53% from the stock’s previous close.

Other equities research analysts have also issued reports about the stock. Truist Financial boosted their target price on shares of CarMax from $47.00 to $50.00 and gave the stock a “hold” rating in a research report on Thursday, June 18th. Morgan Stanley lifted their price target on CarMax from $44.00 to $47.00 and gave the stock a “cautious” rating in a research note on Wednesday, September 23rd. Stephens lifted their price target on CarMax from $66.00 to $74.00 and gave the stock an “overweight” rating in a research note on Friday, September 25th. Robert W. Baird lifted their price target on CarMax from $48.00 to $55.00 and gave the stock an “outperform” rating in a research note on Thursday, June 18th. Finally, Benchmark reaffirmed a “hold” rating on shares of CarMax in a research note on Thursday, June 18th. Two equities research analysts have rated the stock with a Buy rating, fourteen have issued a Hold rating and three have given a Sell rating to the stock. According to data from MarketBeat, the company has a consensus rating of “Reduce” and a consensus target price of $56.71.

CarMax Stock Down 6.3%

Shares of NYSE:KMX opened at $55.51 on Wednesday. The company has a quick ratio of 0.82, a current ratio of 2.33 and a debt-to-equity ratio of 2.66. CarMax has a fifty-two week low of $30.26 and a fifty-two week high of $65.28. The firm’s 50 day moving average price is $59.52 and its 200 day moving average price is $50.30. The stock has a market cap of $7.88 billion, a price-to-earnings ratio of 27.08, a price-to-earnings-growth ratio of 1.88 and a beta of 1.17.

CarMax (NYSE:KMX) last released its quarterly earnings data on Tuesday, September 29th. The company reported $1.16 earnings per share for the quarter, topping analysts’ consensus estimates of $0.73 by $0.43. The company had revenue of $7.88 billion for the quarter, compared to analysts’ expectations 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 last year, the company earned $0.64 earnings per share. As a group, equities research analysts predict that CarMax will post 2.73 earnings per share for the current fiscal year.

Institutional Trading of CarMax

A number of institutional investors have recently modified their holdings of KMX. Basecamp Wealth Advisors LLC grew its holdings 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 period. Huntington National Bank boosted its holdings in CarMax by 62.4% in the 4th quarter. Huntington National Bank now owns 690 shares of the company’s stock worth $27,000 after acquiring an additional 265 shares during the period. Global Retirement Partners LLC purchased a new position in CarMax in the 2nd quarter worth approximately $29,000. Wellington Grp LLC boosted its holdings in CarMax by 6,500.0% in the 1st quarter. Wellington Grp LLC now owns 726 shares of the company’s stock worth $30,000 after acquiring an additional 715 shares during the period. Finally, Commonwealth Retirement Investments LLC purchased a new position in CarMax in the 4th quarter worth approximately $33,000.

CarMax News Roundup

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: CarMax reported adjusted earnings of $1.16 per share, well above the $0.73 consensus estimate, while revenue rose 19.5% year over year to $7.88 billion, exceeding expectations of $7.09 billion. Used-vehicle sales growth and stronger unit volumes were the primary catalysts. CarMax Tops Q2 Earnings and Revenue Estimates
• Positive Sentiment: Retail used-unit comparable sales increased approximately 13%, and management cited pricing initiatives, cost controls and improved execution as evidence that its turnaround is gaining traction. CarMax also signaled that share repurchases could resume in the third quarter and is targeting approximately $200 million in fiscal 2027 exit-rate savings. CarMax Signals Resumption of Share Repurchases
• Positive Sentiment: Several analysts raised their price targets following the results, including RBC to $56 and Baird to $70; Baird maintained an outperform rating. CarMax Analysts Boost Their Forecasts
• Neutral Sentiment: CarMax will host a strategic update webcast on November 3, where management is expected to discuss its GEAR strategy, growth priorities and multiyear financial framework. The event could provide additional guidance on the turnaround. CarMax Strategic Update Webcast
• Negative Sentiment: Investors questioned the quality and sustainability of the earnings beat. Retail gross profit per used vehicle fell $111 to $2,105, wholesale gross profit per unit declined $135 to $858, and management expects CarMax Auto Finance income to be slightly lower in fiscal 2027. Those margin and financing headwinds overshadowed the strong sales growth and contributed to the shares later decreasing after the initial earnings-related increase. CarMax Slides as Investors Reassess Margin Pressure

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.