UPDATE: Needham & Company Starts CarMax (KMX) at Hold
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Needham & Company analyst Chris Pierce initiates coverage on CarMax (NYSE: KMX) with a Hold rating.
The analyst comments "We initiate coverage of KMX with a Hold rating. We see fair value at ~$80, equal to 15x our FY23 EPS estimate (8% below consensus, potentially trough earnings) or 12.5x our FY24 EPS estimate (2% above consensus). The brick and mortar industry leader, KMX is incurring higher costs as it adopts an omni-channel strategy in response to stepped up competition from digitally native competitors who are causing the used vehicle industry to shift from fully offline to more online. We view the new approach as necessary and think it is well understood by investors given recent management commentary on KMX's 4Q21 earnings call. We think a Hold rating is warranted as KMX has 2 choices in our view: continue to spend at increased levels and realize lower near-term earnings, or pull back on spending and cede market share to peers at an accelerating rate."
Shares of CarMax closed at $85.78 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesNeedham & Company, Earnings
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