CarMax (KMX) Tops Q4 Views Amid Robust Used Retail, Wholesale Outperformance - Stifel

Stifel affirms CarMax (NYSE: KMX) at Buy with a $75 price target following Q4 results reported ahead of the opening bell Thursday.

Analyst James Albertine noted that CarMax's Q4 EPS of $0.67 compared with the firm's $0.60 estimate.

Albertine also highlighted the following key metrics:

• Used Retail - Outperform: KMX reported +7.0 percent used retail comp unit growth, well above our +6.0 percent estimate and +6.0 percent StreetAccount consensus. We note +0.6 percent comp ASP growth was below our +2.5 percent model, blending to +7.6 percent total comp used retail sales (vs. our +8.1 percent estimate). KMX noted its seventh consecutive quarter of y/y growth in traffic as well as improved conversion.
• Used Wholesale - Outperform: KMX reported +12.3 percent wholesale unit growth vs. our +6.0 percent model while +3.5 percent ASP growth was ahead of our +2.0 percent estimate, blending to +17.0 percent total wholesale sales growth vs. our +8.1 percent model.
• CAF Income - Underperform: CAF income rose +11.8 percent y/y to $90.4 mm vs. our +8.2 percent y/y to $87.4 mm estimate, driven by a +17.8 percent y/y increase in average managed receivables (vs. our +16.8 percent y/y estimate) to $8.2 bn. Total interest margin declined to 6.26 percent from 6.63 percent in 4Q13 relative to our 6.20 percent estimate.

For an analyst ratings summary and ratings history on CarMax click here. For more ratings news on CarMax click here.

CarMax closed at $68.39 yesterday.

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