JPMorgan placed CarMax on “Negative Catalyst Watch” while keeping an Underweight rating on the shares with a $55 price target ahead of the Q1 report. Volumes at CarMax continue to remain weak and are likely to re-surface more structural and competitive concerns around the company’s long-term growth and margin potential, the analyst tells investors in a research note. The firm says that on the fundamental used industry backdrop, affordability pressures are likely to persist with the recent move higher in rates offsetting some of the relief from pricing moderation and higher tax refunds.
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