CarMax: William Blair Ups To Outperform; Believes The Reward Scenario Is Now Greatly Improved

William Blair analyst Sharon Zackfia today upgraded her rating on CarMax Inc. (KMX) to Outperform from Market Perform following a strong first-quarter earnings report.

“With strong likelihood of material upside earnings revisions and a palatable valuation of 15 times our likely new calendar 2015 EPS estimate (versus a typical range of 15 to 20 times), we believe the reward scenario is now greatly improved for investors in CarMax over the next 12 to 18 months. Over the longer term, we continue to believe that CarMax remains one of the best investment ideas in retail, with the opportunity to expand the business from 136 locations today to at least 200 to 300 stores using the company’s current store prototypes, with a new smaller-market format test potentially adding another 75 to 125 sites to the company’s growth plans”, Zackfia wrote.

According to TipRanks, which measures analysts and bloggers success rate based on how their calls perform, analyst Sharon Zackfia currently has a one-year average return of 35.4% and a 67% success rate. She is ranked #297 out of 3118 analysts.

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