UPDATE: Deutsche Bank Reiterates on CarMax Following F3Q14 EPS Report
In a report published Monday, Deutsche Bank analyst Greg Poole reiterated a Hold rating on CarMax (NYSE: KMX), but lowered the price target from $46.00 to $45.00.
In the report, Deutsche Bank noted, “Carmax reported F3Q14 EPS of $0.47 vs DBe of $0.50. The variance to our estimate was fully explained by a higher-than-expected tax rate ($0.01) and a reserve adjustment to reflect higher early cancellations of Extended Service Plans ($0.02, one-time in nature). Used Retail remained robust (Comp's 10% vs DBe 8% and margin per-unit $2,149 vs DBe $2,151), CAF Income was inline, and SG&A leverage continued (SG&A per-unit down 4.5% YOY, SG&A / Sales down 20bp's YOY). We maintain Hold rating based on valuation.”
CarMax closed on Friday at $48.08.
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