CarMax (NYSE:KMX) Trading 4.1% Higher Following Analyst Upgrade

CarMax, Inc. (NYSE:KMX) traded up 4.1% during mid-day trading on Wednesday after Morgan Stanley raised their price target on the stock from $44.00 to $47.00. Morgan Stanley currently has a cautious rating on the stock. CarMax traded as high as $59.13 and last traded at $59.18. Approximately 3,055,626 shares changed hands during mid-day trading, a decline of 1% from the average session volume of 3,091,095 shares. The stock had previously closed at $56.84.

A number of other brokerages have also recently commented on KMX. Robert W. Baird increased their price target on CarMax from $48.00 to $55.00 and gave the company an “outperform” rating in a research note on Thursday, June 18th. UBS Group set a $60.00 price target on CarMax in a report on Wednesday, July 29th. Mizuho boosted their target price on shares of CarMax from $38.00 to $43.00 and gave the stock a “neutral” rating in a report on Thursday, June 18th. Truist Financial raised their price target on shares of CarMax from $47.00 to $50.00 and gave the company a “hold” rating in a research note on Thursday, June 18th. Finally, Zacks Research cut shares of CarMax from a “strong-buy” rating to a “hold” rating in a research note on Wednesday, September 16th. Two analysts have rated the stock with a Buy rating, fourteen have given a Hold rating and four have issued a Sell rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Reduce” and an average target price of $51.87.

Insiders Place Their Bets

In related news, Director Sona Chawla purchased 2,000 shares of the firm’s stock in a transaction that occurred on Thursday, June 25th. The stock was bought at an average cost of $53.39 per share, with a total value of $106,780.00. Following the completion of the purchase, the director directly owned 21,702 shares in the company, valued at approximately $1,158,669.78. This represents a 10.15% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Insiders own 1.01% of the company’s stock.

CarMax News Summary

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: CarMax’s second-quarter earnings were characterized as particularly strong among vehicle retailers, potentially supporting confidence in the company’s operating performance and turnaround efforts. Vehicle retailer Q2 earnings: CarMax simply the best
• Positive Sentiment: The company is eliminating 145 corporate positions, or roughly 4% of its corporate workforce, as part of an effort to operate more efficiently and “run leaner.” If successful, the reductions could lower expenses and improve profitability. CarMax Cuts 145 Corporate Jobs
• Neutral Sentiment: Morgan Stanley raised its CarMax price target from $44 to $47 while retaining an “equal weight” rating. The higher target reflects modestly improved expectations, but it remains below the recently cited share price, implying analysts still see limited upside. Morgan Stanley price-target update
• Neutral Sentiment: Analysts broadly maintain a cautious stance, with CarMax receiving a consensus “Reduce” rating. Separately, pre-earnings analysis said the company lacked the usual combination of factors associated with a likely earnings beat, increasing uncertainty around the report. CarMax consensus rating
• Negative Sentiment: The latest layoffs represent CarMax’s third corporate workforce reduction in approximately 11 months and are occurring amid a soft automotive market. Investors may interpret the repeated cuts as evidence of continuing demand or profitability pressure, helping explain recent weakness in the stock. Why CarMax is down after layoffs
• Negative Sentiment: Bernstein Liebhard announced an investigation into potential breaches of fiduciary duty by certain CarMax directors and officers. Although the announcement does not establish wrongdoing, it adds legal and governance risk. CarMax shareholder investigation alert

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in KMX. State Street Corp increased its stake in CarMax by 5.6% during the 2nd quarter. State Street Corp now owns 5,156,276 shares of the company’s stock worth $272,715,000 after buying an additional 271,216 shares in the last quarter. Anchor Investment Management LLC acquired a new position in CarMax in the 2nd quarter valued at $37,000. The Manufacturers Life Insurance Company lifted its holdings in CarMax by 0.9% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 2,420,139 shares of the company’s stock valued at $128,001,000 after purchasing an additional 21,882 shares in the last quarter. Capstone Financial Advisors Inc. lifted its stake in shares of CarMax by 5.6% in the second quarter. Capstone Financial Advisors Inc. now owns 9,500 shares of the company’s stock worth $502,000 after buying an additional 500 shares in the last quarter. Finally, WINTON GROUP Ltd increased its holdings in shares of CarMax by 181.0% in the second quarter. WINTON GROUP Ltd now owns 38,780 shares of the company’s stock valued at $2,051,000 after purchasing an additional 24,977 shares during the last quarter.

CarMax Price Performance

The company has a market cap of $8.30 billion, a price-to-earnings ratio of 38.63, a price-to-earnings-growth ratio of 2.67 and a beta of 1.17. The stock has a 50 day simple moving average of $59.58 and a two-hundred day simple moving average of $49.66. The company has a debt-to-equity ratio of 2.87, a current ratio of 2.70 and a quick ratio of 0.82.

CarMax Company Profile

CarMax, Inc is a specialty retailer of used vehicles and one of the largest automotive retailers in the United States. The company sells a broad selection of used cars, trucks and sport utility vehicles through its retail locations and online platform. CarMax also purchases vehicles from consumers and other sources, providing customers with a streamlined alternative to traditional private-party sales.

In addition to retail sales, CarMax operates wholesale vehicle auctions for vehicles that do not meet its retail standards or business requirements.