In a report released today, Daniela Haigian from Morgan Stanley reiterated a Buy rating on CarMax (KMX – Research Report), with a price target of $80.00.
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Daniela Haigian has given her Buy rating due to a combination of factors that highlight CarMax’s strategic positioning and growth potential. The company has shown consistent same-store sales growth over the past four quarters, demonstrating its ability to execute operationally. This growth, coupled with strong gross profit per unit and operational leverage, suggests that CarMax is effectively navigating the current market environment.
Moreover, CarMax’s transition from a heavy investment phase in omnichannel development to monetizing profitable growth is seen as a positive trajectory. The company’s strategy to expand reconditioning capacity, enhance sourcing channels, and increase CAF financing penetration is expected to drive retail volume growth. Additionally, CarMax’s ability to leverage SG&A towards its gross profit target positions it competitively against rivals like Carvana. Haigian sees a 20% upside to the $80 price target, with a favorable risk-reward ratio, making the stock an attractive investment opportunity.
In another report released on June 23, Evercore ISI also maintained a Buy rating on the stock with a $85.00 price target.