- Analysts lauded CarMax Inc's (NYSE:KMX) Q1 beat while also pointing out the macro concerns.
- RBC Capital analyst Steven Shemesh maintained CarMax with an Outperform and raised the price target from $104 to $108 in a note titled, "F1Q'23 Follow-Up – Navigating Volatility Well."
- KMX's results were broadly in line with expectations, Shemesh noted.
- He expected the inflationary pressures and the eventual replenishment of new car inventory to weigh on the used vehicle market.
- He believes KMX's recent investments behind digital capabilities position it well to continue gaining share.
- Chris Pierce from Needham reiterated a Hold rating on CarMax post KMX's fiscal 1Q results in a note titled "Possible Switch To Premium From Unleaded, Reiterate Neutral."
- He was impressed with the execution and a notable potential positive philosophical shift in KMX's critical KPI that could have staying power even as the used vehicle end market shows sustained weakness.
- Pierce's Neutral rating is predicated on end-market weakness, and lower SG&A leverage as KMX continued its pivot to omnichannel. Still, KMX delivered higher gross profits vs. his expectations, mitigating some of his concerns on SG&A leverage.
- Also, CAF income provided an offset to some of the marketplace weaknesses.
- Price Action: KMX shares traded higher by 0.26% at $98.62 on the last check Monday.
- Photo via Wikimedia Commons
