Canaccord Genuity Morning Coffee on CarMax (KMX): Mixed News
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Price: $67.88 -0.67%
Rating Summary:
17 Buy, 14 Hold, 3 Sell
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Today's Overall Ratings:
Up: 5 | Down: 3 | New: 2
Rating Summary:
17 Buy, 14 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 5 | Down: 3 | New: 2
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Canaccord Genuity Morning Coffee on CarMax (NYSE: KMX): Mixed news.
Canaccord analyst says, "Shares of CarMax dropped after the company Q4 earnings beat estimates, but sales growth disappointed and investors remain concerned about a possible shortage of vehicles due to the Japanese earthquake. The largest retailer of used cars in the U.S. reported quarterly earnings of $0.39 per share on revenue of $2.25 billion while analysts had expected $0.38 on $2.18 billion. However, investors were disappointed as the company’s sales growth came in at 12% versus the 14-15% many were expecting. Additionally, supply chain disruptions in Japan may pose a headwind for the company as it sells Nissan and Toyota (NYSE: TM) vehicles in the U.S. under franchise agreements. Morningstar says that there may be worries about gross margin being squeezed by higher procurement costs as the situation in Japan forces dealers to purchase more used vehicles (at higher prices than usual) to compensate. Meanwhile, other analysts believe that the higher prices and shortage may be a benefit to CarMax in the coming year. Higher sale prices would boost the top line, and many who have put off purchasing vehicles until the economic recovery gained better traction may now be coming to market, and a shortage of new vehicles will push them in the direction of CarMax."
Canaccord analyst says, "Shares of CarMax dropped after the company Q4 earnings beat estimates, but sales growth disappointed and investors remain concerned about a possible shortage of vehicles due to the Japanese earthquake. The largest retailer of used cars in the U.S. reported quarterly earnings of $0.39 per share on revenue of $2.25 billion while analysts had expected $0.38 on $2.18 billion. However, investors were disappointed as the company’s sales growth came in at 12% versus the 14-15% many were expecting. Additionally, supply chain disruptions in Japan may pose a headwind for the company as it sells Nissan and Toyota (NYSE: TM) vehicles in the U.S. under franchise agreements. Morningstar says that there may be worries about gross margin being squeezed by higher procurement costs as the situation in Japan forces dealers to purchase more used vehicles (at higher prices than usual) to compensate. Meanwhile, other analysts believe that the higher prices and shortage may be a benefit to CarMax in the coming year. Higher sale prices would boost the top line, and many who have put off purchasing vehicles until the economic recovery gained better traction may now be coming to market, and a shortage of new vehicles will push them in the direction of CarMax."
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