Oppenheimer Downgrades CarMax To Perform, Cites Upcoming Tougher Comps

In a new report, Oppenheimer analyst Brian Nagel downgraded CarMax from Outperform to Perform and removed the firm’s $77 target for the stock.

Although the firm remains positive on the company’s long-term outlook, Nagel sees too many near-term headwinds for the stock to outperform.

Tough Comps

One of the biggest obstacles that Nagel sees ahead for CarMax is its upcoming 2014 comps. While 2014 Q2 used car units comp was just +0.2 percent, Q3 and Q4 comps jump to +7.4 percent and +7.0 percent, respectively. Oppenheimer is now calling for car unit growth of only 1–2 percent in the second half of the year, a number that will not be able to measure up to last year’s growth.

Shrinking Multiple?

Oppenheimer noted…

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