UPDATE: Goldman Sachs Upgrades CarMax to Buy on 2013 Outlook
Goldman Sachs raised its rating on CarMax (NYSE: KMX) from Neutral to Buy and raised its price target from $32 to $42.
Goldman Sachs noted, "We view KMX as one of the best ideas in our space for 2013, with idiosyncratic catalysts; we see an inflection point in earnings and financial returns. Drivers include used car supply, tackling key technology challenges (mobile); benefiting from re-accelerated growth; and, capital allocation (first buyback). While the stock has acted well of late (+27% since September 28 vs. S&P -2%), EPS trends and share price performance have underperformed growth peers for the past two years, and we expect the stock to ride accelerating earnings trends and a nominal rerating of its multiple as well."
CarMax closed at $35.88 on Wednesday.
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