09:05 AM EDT, 06/21/2024 (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 maintain a 12-month target of $70, based on a FY 26 (Feb.) P/E of 18.7x, a justified discount to KMX's 5-year mean forward P/E of 21.7x. We lower our FY 25 EPS estimate to $3.05 from $3.10 and to $3.75 from $4.00 for FY 26. KMX posts May-Q EPS of $0.97 vs. $1.44 (-33%), two cents ahead of consensus. The beat was driven by a stronger-than-expected top line and gross margins. Net sales fell 7.5% to $7.11B ($20M ahead of consensus), driven by a combination of lower average sales prices and volumes. Notably, the drop in wholesale vehicle revenue (-17.0% Y/Y) was steeper than for used vehicles (-5.4%). Gross margin expanded 50 bps to 11.1% (30 bps ahead of consensus). With elevated interest rates and inventory levels likely to continue weighing on pricing and volumes, we recommend remaining on the sidelines in KMX. Simply put, we think the stock's risk/reward remains fairly balanced at current levels and investors should remain patient, waiting for clearer signs of improvement in used car market fundamentals.