The Richmond-based used-car retailer faces near-term competitive pressures, the firm said.
"CarMax's comparable sales are unlikely to recover in the short-run as public dealer peers price aggressively and accept margin declines to grow their service backlog," Sterne Agee said.
Sterne Agee lowered its 2016 earnings outlook for CarMax to $3.33 per share from $3.36 per share.
CarMax stock closed up by 0.81% to $48.83 on Friday.
Separately, 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.
TheStreet Ratings rates this stock as a "hold" with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and unimpressive growth in net income.
You can view the full analysis from the report here: KMX