09:40 AM EDT, 04/11/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month price target by $5 to $70, based on a FY 26 (Feb.) P/E of 17.5x, a justified discount to KMX's five-year mean forward P/E of 21.4x. We lower our FY 25 EPS estimate to $3.10 from $3.65 and introduce FY 26's at $4.00. KMX posted Feb-Q EPS of $0.32 vs. $0.44 (-27%), well short of the $0.45 consensus. The miss was driven by weaker-than-expected net sales and gross margin. Net sales fell 1.7% to $5.63B ($190M below consensus), driven by lower average sales prices of 2.3% for used vehicles and 3.2% for wholesale vehicles. Gross margin contracted 30 bps to 10.4% (30 bps short of consensus). With higher-for-longer interest rates likely to continue weighing on auto sales volume and inventories acting as an overhang on pricing, we see no good reason to buy KMX shares at the moment. According to Dealertrack and Cox Automotive data, the average U.S. used vehicle loan rate was a staggering 14.6% in February. We think Street estimates are likely to come down and consider KMX's valuation fair.