Needham analyst Chris Pierce reiterated a Buy rating on CarMax today and set a price target of $60.00.
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Chris Pierce has given his Buy rating due to a combination of factors, despite some challenges faced by CarMax. The company is experiencing difficulties with consistent performance, as evidenced by negative unit comparisons and high loan losses impacting earnings. However, there is potential for recovery in unit growth, as some issues may be temporary within the quarter.
Furthermore, while CarMax’s omni-channel strategy remains unproven, the negative earnings from their CarMax Auto Finance division are limited to specific loan vintages from 2022 and 2023. Although there are concerns about economic conditions affecting future loans, the company’s performance has been solid so far. The adjusted price target reflects a more conservative outlook on unit growth, but the potential for share gains remains, justifying the Buy rating.
Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KMX in relation to earlier this year.