CarMax Reports Worse Delinquencies But Better Charge-Offs

CarMax, Inc.

reported CarMax Auto Finance (

) secure data showed that delinquencies rose +34bps m/m vs the +14bps historical average, Goldman Sachs reports, but despite the delinquency performance, CAF charge-offs were +5bps better m/m vs. +6bps average. Goldman expects used car profitability to prove sustainable and achieve higher profits, and also is very attracted to KMX's unique business model that could provide significant store growth, while viewing valuation as in-line. Goldman maintains its Neutral rating and $24 price target for CarMax, Inc., which closed yesterday at $23.78.