What Happened?
Shares of used automotive vehicle retailer Carmax (NYSE: KMX) jumped 7.4% in the afternoon session after an analyst at Baird raised the company's price target to $48 from $42. The analyst firm maintained its Outperform rating on the stock.
This more optimistic valuation came as some industry forecasts pointed to a favorable market for used car buyers in 2026. Projections suggested that inventory levels were set to improve, which could create a positive sales environment for retailers like CarMax. The improved outlook provided a potential tailwind for the company's performance.
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What Is The Market Telling Us
CarMax’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 26 days ago when the stock dropped 3.1% on the news that the Dow Jones Industrial Average fell as much as 0.7%, reflecting lingering uncertainty, and capping off a volatile week which saw stocks enjoy some relief as President Donald Trump reduced tensions with European allies by backing off his threat of imposing new tariffs. Threats of tariffs initially created uncertainty for businesses, as they can lead to higher costs for multinational corporations and disrupt global supply chains. By withdrawing the threat, the administration removed a significant headwind for the market, prompting a relief rally. This development was a key factor in helping major indexes recover from earlier losses, even as some analysts noted that underlying geopolitical risks and market volatility remain concerns for investors.
CarMax is up 15.7% since the beginning of the year, but at $45.45 per share, it is still trading 49% below its 52-week high of $89.19 from February 2025. Investors who bought $1,000 worth of CarMax’s shares 5 years ago would now be looking at an investment worth $377.96.
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