UPDATE: J.P. Morgan Lowering Price Target on CarMax

J.P. Morgan Chase & Co. is out with a research report on CarMax Inc. KMX and is lowering its price target to $29 from $34, but is keeping its Neutral rating on shares. In a note to clients, J.P. Morgan Chase & Co. writes, "Following KMX's F2Q conference call, we feel more comfortable that despite some moderation, this quarter's volume weakness is likely not indicative of a broader cliff event witnessed in the last downturn. Further, increased wholesale activity revealed consumers may be strapping for cash as this quarter saw an increase in vehicles sold to KMX, but what seemed to be a lighter conversion rate, suggesting customers likely sold a secondary vehicle for a liquidity boost. On balance, while we are encouraged that KMX will not be scaling down its future investments, we remain cautionary towards the remainder of the year and FY2013 unless we begin to see any material improvement in macro catalysts." Shares of KMX lost 44 cents yesterday to close at $23.41.