CarMax Scores Upgrade Before Earnings as Analyst Cites Outlook for Profits

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The stock lost 53% last year, but performance has improved this year as management has cut costs. Wedbush recommends buying the stock now.

A Wedbush analyst upgraded his rating on CarMax ‘s stock to Outperform on Monday, citing factors likely to boost the used-car retailer’s gross profit per unit throughout the fiscal year.

The story has improved this year as the company cut costs by lowering staffing levels and reducing advertising expenses, among other actions. It has stopped buying back its stock, helping it to conserve cash. Gross profit per unit was less than $2,300 for most of fiscal 2022. The Wall Street consensus calls are for $2,288 and $2,240 for the second and third fiscal quarters, respectively.

 

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