Oppenheimer Reiterates a Buy Rating on CarMax

Oppenheimer analyst Brian Nagel reiterated a Buy rating on CarMax (NYSE: KMX) today and set a price target of $72. The company’s shares opened today at $61.87, close to its 52-week high of $64.88.

Nagel said:

“We look very favorably upon the largely in-line Q3 (Nov.) results that CarMax (KMX) reported today. For some time, we have maintained the non-consensus view that used car sales weakness at KMX in 2015 and early 2016 reflected transitory issues and not structural shortcomings at the chain. In Q3 (Nov.), total company used car unit comps accelerated further to 5.4%, while comps ex. sales of third-party financed subprime vehicles increased nearly 10%. Improving used car sales, particularly against a backdrop of steady used car gross profits, should continue to go a long way in undermining the still pervasive short thesis weighing upon shares.”

According to TipRanks.com, Nagel is a 5-star analyst with an average return of 4.2% and a 57.8% success rate. Nagel covers the Services sector, focusing on stocks such as Dick’s Sporting Goods, Advance Auto Parts, and Lumber Liquidators.

CarMax has an analyst consensus of Moderate Buy, with a price target consensus of $65.

The company has a one year high of $64.88 and a one year low of $41.25. Currently, CarMax has an average volume of 2.35M.

Based on the recent corporate insider activity of 42 insiders, corporate insider sentiment is neutral on the stock. Most recently, in September 2016, Jeffrey Garten, a Director at KMX sold 6,300 shares for a total of $336,483.

CarMax, Inc. is as a holding company, which operates as a retailer of used vehicles and wholesale vehicle auction operator. The company operates through the following segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment consists of all aspects of the auto merchandising and service operations, excluding financing provided by CarMax Auto Finance. The CarMax Auto Finance segment provides vehicle financing through CarMax superstores. It also offers financing solely to customers purchasing vehicles at CarMax, and offers qualifying customers an array of competitive rates and terms, allowing them to choose the one that best fits their needs. The company was founded by Richard L. Sharp and William Austin Ligon in September 1993 and is headquartered in Richmond, VA.