CarMax (NYSE:KMX) Shares Gap Up on Analyst Upgrade

CarMax, Inc. (NYSE:KMX)’s share price gapped up before the market opened on Thursday after Bank of America upgraded the stock from an underperform rating to a buy rating. The stock had previously closed at $49.82, but opened at $52.11. Bank of America now has a $65.00 price target on the stock. CarMax shares last traded at $51.63, with a volume of 465,548 shares.

A number of other brokerages also recently weighed in on KMX. JPMorgan Chase & Co. boosted their target price on CarMax from $60.00 to $70.00 and gave the stock a “neutral” rating in a research note on Friday, September 18th. Mizuho increased their price target on CarMax from $38.00 to $43.00 and gave the company a “neutral” rating in a research report on Thursday, June 18th. Royal Bank Of Canada lifted their price target on CarMax from $45.00 to $56.00 and gave the stock a “sector perform” rating in a report on Wednesday, September 30th. Morgan Stanley lifted their price target on CarMax from $47.00 to $53.00 and gave the stock an “equal weight” rating in a report on Wednesday, September 30th. Finally, Benchmark reissued a “hold” rating on shares of CarMax in a research report on Thursday, June 18th. Three investment analysts have rated the stock with a Buy rating, fourteen have issued a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Hold” and a consensus price target of $57.85.

More CarMax News

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Bank of America upgraded CarMax from “Underperform” to “Buy” and assigned a $65 price target, implying substantial upside from recent levels. The upgrade is likely the biggest catalyst for the stock’s advance, signaling improved confidence in CarMax’s earnings outlook and valuation.
• Positive Sentiment: Zacks Research raised its CarMax earnings forecasts across several future periods. Estimates increased to $3.39 per share for fiscal 2027, $3.68 for fiscal 2028 and $4.25 for fiscal 2029, compared with previous estimates of $2.54, $2.71 and $2.91, respectively. Quarterly estimates were also raised, including fiscal 2028 first-quarter EPS to $1.21 from $0.95 and fiscal 2029 second-quarter EPS to $1.16 from $0.73. The revisions suggest analysts expect improving profitability over the next several years.
• Positive Sentiment: CarMax was added to multiple Zacks “Strong Buy” lists for October 15, including the overall Zacks Rank #1 list and its list of best-value stocks. New Strong Buy Stocks for October 15th
• Neutral Sentiment: Despite the higher forecasts, Zacks Research maintains a “Hold” rating, indicating that its earnings optimism has not yet translated into a formal bullish recommendation. The current-year consensus EPS estimate remains $3.01.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Krilogy Financial LLC increased its stake in shares of CarMax by 38.2% during the 3rd quarter. Krilogy Financial LLC now owns 19,097 shares of the company’s stock worth $968,000 after purchasing an additional 5,282 shares during the last quarter. NorthCrest Asset Manangement LLC raised its holdings in shares of CarMax by 28.5% in the 3rd quarter. NorthCrest Asset Manangement LLC now owns 15,574 shares of the company’s stock worth $838,000 after purchasing an additional 3,450 shares during the period. Wedmont Private Capital purchased a new position in CarMax in the third quarter valued at approximately $209,000. GAMMA Investing LLC lifted its stake in CarMax by 15.1% in the third quarter. GAMMA Investing LLC now owns 11,347 shares of the company’s stock valued at $625,000 after purchasing an additional 1,487 shares during the last quarter. Finally, Farther Finance Advisors LLC grew its holdings in CarMax by 48.7% during the third quarter. Farther Finance Advisors LLC now owns 11,089 shares of the company’s stock valued at $611,000 after purchasing an additional 3,631 shares during the period.

CarMax Trading Up 3.6%

The firm has a fifty day simple moving average of $58.53 and a two-hundred day simple moving average of $51.08. The firm has a market capitalization of $7.32 billion, a P/E ratio of 25.17, a price-to-earnings-growth ratio of 1.47 and a beta of 1.23. The company has a debt-to-equity ratio of 2.66, a current ratio of 2.33 and a quick ratio of 0.57.

CarMax (NYSE:KMX) last released its earnings results on Tuesday, September 29th. The company reported $1.16 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.73 by $0.43. The business 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 7.76% and a net margin of 1.06%. The business’s revenue for the quarter was up 19.5% on a year-over-year basis. During the same period last year, the business posted $0.64 earnings per share. On average, equities research analysts anticipate that CarMax, Inc. will post 3.01 earnings per share for the current fiscal year.

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.