Wedbush analyst, Seth Basham, reiterated his Outperform rating on shares of CarMax (NYSE: KMX) and raised his price target to $81 from $77 after used unit comps of 5.3% top consensus 4.9%, and EPS of $0.98 beat consensus $0.95.

In addition to results being better than expectations, several points of the bear thesis lost support:

1) CAF outcome handily beat expectations for the second straight quarter, driven by a 7.8% y/y decline in loan loss provisions as losses were generally consistent with company expectations.

2) Tier 3 (subprime) loan penetration increased for the first time in years, showing stabilization for this sensitive borrower

3) gross profit per unit (GPU) increased 0.8% y/y, showing the company's ability to maintain profitability and drive sales even with intense competition

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

Shares of CarMax closed at $74.19 yesterday.