KMX Stock Alert: What to Know as JPMorgan Downgrades CarMax

  • CarMax (KMX) stock is trending today after receiving a downgrade from JPMorgan analysts.
  • The analysts feel that hope for a recovery with CarMax is “premature.”
  • KMX stock is trading flat to slightly higher despite the downgrade.
a Carmax (KMX) sign on a storefront
Source: Jonathan Weiss /

Some CarMax (NYSE:KMX) stock investors may be hoping for a recovery in 2023 after a bruising 2022. However, a group of analysts evidently believe it’s “premature” for investors to be hopeful. That’s a tough pill for the bulls to swallow — although, impressively enough, KMX stock isn’t falling today.

Analysts with JPMorgan have apparently decided it’s too early to bet on CarMax staging a recovery. Specifically, analyst Rajat Gupta is concerned that CarMax will continue to struggle with low used car sales volumes.

Indeed, JPMorgan doesn’t see anything close to a recovery with CarMax. Gupta says the “numbers are not only far from reset for [fiscal 2024] but the trajectory to eventual normalization is also far from clear today and likely to underwhelm.”

On top of that, analysts have expressed concerns about “rising delinquencies among customers of CarMax Auto Finance.” If economic conditions worsen, CarMax may have to deal with nonpayment of customers’ debts.

What’s Happening With KMX Stock?

Given the downbeat commentary from JPMorgan analysts, one might assume that KMX stock would get hammered today. Yet, this actually hasn’t happened yet.

As of this writing, CarMax shares were slightly in the green, up by a little under 1%. This is an unexpected result, but Wall Street doesn’t always respond as people expect.

The resilience of KMX stock is even more surprising because JPMorgan analysts downgraded shares from “neutral” to “underweight.” Further, the analysts assigned shares an unambitious price target of $60 for KMX, which currently trades closer to $67.

If that price target turns out to be accurate, the CarMax share price would decline somewhat from its current level. This is a distinct possibility if analysts’ concerns about a slowing used vehicle market are spot-on.

Yet, the future is hard to predict and today’s price action in KMX stock evidences this. Just maybe, CarMax’s big recovery is just around the corner. Or at least, investors can hope so.

On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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