After a recent report in which Morgan Stanley analysts predicted that used car prices would endure an unprecedented decline in the coming years, the share prices of some used car merchants could be under pressure.

According to the report, the price of fill-sized used cars has declined year-over-year (YOY) for 39 consecutive months, and the YOY price decline in November for full sized cars was more than 20 percent. Analysts expect a similar trend in the future for other vehicle segments as well.

Stock Watch: CarMax

The stock of used car retailer CarMax, Inc. KMX 1.04% is trading near all-time highs, and the company has been able to grow its earnings per share (EPS) by an average of over 50 percent annually the past five years.

However…

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