CarMax downgraded to Equal Weight from Overweight at Stephens

Stephens downgraded CarMax (KMX) to Equal Weight from Overweight with a price target of $42, down from $53. After having listened to numerous client points of view, reconsidered the firm’s prior analysis and data, and discussed the situation with industry participants, the firm now concludes there is “likely more risk and potential stock downside than appreciation possibility over the next 12 months,” the analyst tells investors. While the firm believes CarMax is a valuable asset, it sees no explicit plan to unlock this value and sees the potential for further deterioration via both year-over-year unit and retail GPU declines, adding that it worries “a new, more measurable downside phase may be starting.”