The firm has a $68 price target on shares of the Richmond, VA-based used-car retailer.
"A number of positives for the new vehicle market are likely to become less favorable. Regulatory content on new vehicles will be going up. Used vehicles values are falling. And credit terms aren't likely to get any better," Deutsche Bank wrote in an analyst note.
"We've discussed how this is a headwind for OEMs and cyclical suppliers. But we also believe that KMX should be a net winner," the firm noted.
CarMax has consistently outperformed during industry plateaus and declines, according to Deutsche Bank.
The firm believes that the divergence may be even more accurate during this cycle because the new market slowdown will likely be driven by a shift to used vehicles.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, growth in earnings per share and notable return on equity.
The team believes its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: KMX