CarMax comp weakness ‘trumps everything else,’ says JPMorgan

JPMorgan says CarMax’s fiscal Q3 results were an upside surprise, driven by a larger than expected reduction in loss allowance within the Auto Finance business while the core retail operation was also slightly better than estimates. CarMax deserves credit for continued reduction in spending and optimizing costs in other areas like services, “though continued weakness in comps trumps everything else,” the analyst tells investors in a research note. The firm sees continued risk to forward estimates and keeps an Underweight rating on the shares with a $60 price target.