JPMorgan analyst Rajat Gupta downgraded CarMax to Underweight from Neutral with an unchanged price target of $60. Given the recent outperformance of the shares and on back of material downward estimate revisions, the analyst sees CarMax’s risk/reward as skewed to the downside. The company is likely to be a long-term share gainer in the used car market, but its path to realizing this potential continues to get pushed out, making it difficult to discount the timing and magnitude of normalized margins, Gupta tells investors in a research note.
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