The firm said it lowered its rating on the holding company, which operates in two segments: CarMax Sales Operations and CarMax Auto Finance, as it believes CarMax is facing multiple growth headwinds.
Morgan Stanley raised its price target on CarMax stock to $56 from $55.
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CarMax is a retailer of used cars as well as a wholesale vehicle auction operator.
Separately, TheStreet Ratings team rates CARMAX INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CARMAX INC (KMX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows: