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…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!