Goldman Sachs Maintains Neutral, Lowers PT to $29 on CarMax

Goldman Sachs reiterates its Neutral rating on CarMax KMX and lowers its target price to $29 from $31 as it revises estimates to reflect lower than expected same-store sales. Goldman Sachs notes, "3Q EPS of $0.36 tracked flat yoy, above our $0.34 estimate but below the Street at $0.38. Persistent softness in retail used same-store unit trends (-3% yoy vs. industry used car sales +6%) and higher operating expenses weighed on results, offsetting better profits per retail car and better showings in ancillary areas (CAF income, wholesale profits). Additionally, KMX guided to an acceleration in store growth, in line with our modeling. We flow the impact of softer retail sales through our model, trimming 2011 EPS by a penny, to $1.76 from $1.77 prior, and 2012 and 2013 by $0.10 each, to $1.85 and $2.05, respectively." KMX closed at $29.35 per share on Wednesday.