CarMax price target raised to $70 from $65 at JPMorgan

JPMorgan raised the firm’s price target on CarMax (KMX) to $70 from $65 and keeps an Underweight rating on the shares. The firm increased Q3 estimates to reflect better units, aided by a pickup in overall automobile demand post elections and hurricane replacement demand, the recent pickup in wholesale prices and better leverage on service gross profit given higher volumes. However, JPMorgan continues to view the risk/reward for CarMax shares as unattractive within the auto retail ecosystem, saying its multiples are already baking in a sharp inflection in volume and margins in a backdrop that is “still shaky for used cars.”