In one of the more significant gear shifts on the stock market Thursday, CarMax (KMX +4.92%) roared to a 13% gain after sputtering to a 9% loss the previous trading session. The auto retailer's equity benefited from several positive post-earnings analyst notes; among these was a recommendation upgrade.
Foot on the gas
CarMax published its first quarter of fiscal 2027 results on Wednesday morning, and investors reacted negatively, despite convincing top- and bottom-line beats.
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But Thursday saw analysts weigh in with adjusted takes on the stock, and most of these changes were bullish.
For example, big bank JPMorgan Chase's J.P. Morgan bumped its price target $1 higher to $38, although it maintained its underweight (i.e., sell) recommendation. Baird was more hopeful, raising its price target to $55 per share from $48; it kept its outperform (buy) rating intact.
Of the numerous analyst adjustments, the most impactful was the one made by Stephens pundit Jeff Lick. He upped his outlook on CarMax to overweight (buy) from his preceding equal weight (hold). In doing so, he lifted his price target significantly, to $66 per share from $43.
NYSE: KMX
Key Data Points
Top dog
According to reports, Lick wrote that CarMax has the ability to remain the No. 1 used-car retailer in this country. Even if its position weakens to some extent, in his view, it's still a go-to for many customers looking to buy in that segment.
To me, CarMax's quarterly performance was impressive, with top-line growth of 6% year over year in a fairly challenging environment for auto sales. Assuming it can maintain, or at least approach, such growth numbers, its stock should generally do well.
