Morgan Stanley analyst Adam Jonas lowered the firm’s price target on CarMax to $75 from $90 and keeps an Overweight rating on the shares. The analyst notes CarMax posted same-store down 22.4%, a similar magnitude decline to the GFC. While his bear case of a 30% used market price drop looks more realistic, Jonas stick with the Overweight on CarMax valuation versus normalized earnings and as a hedge against franchise dealers where he sees greater negative revision risk. Despite the headwinds confronting the used car market, the analyst remains relatively constructive on CarMax as earnings revisions have taken 2023 forecasts to levels less than half that achieved pre-COVID.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Published first on TheFly
See the top stocks recommended by analysts >>
Read More on KMX:
- Plunging Used Car Prices Continue to Slam CVNA
- Wedbush reiterates Underperform on Carvana on weakening results, liquidity
- Used car prices still have room to decrease ‘significantly,’ says Morgan Stanley
- JPMorgan says ‘pain far from over,’ too early to jump in at CarMax
- CarMax price target lowered to $75 from $100 at Oppenheimer