BofA: Tight used car market favors AutoNation over CarMax

Investing.com06-14

Investing.com - Bank of America (NYSE:BAC) (BofA) analysts have expressed their preference for AutoNation Inc (NYSE:AN) over CarMax Inc (NYSE:KMX) in a research note on Thursday. The sourcing ...

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This dynamic is likely to impede CarMax's same-store unit growth.CarMax is facing increased competition from franchised dealers and Carvana Co , further exacerbating the issue.As volume leverage fails to materialize, CarMax is also grappling with inflated costs. Unlike franchised dealers, CarMax has limited means to counter the challenging used car market.The company's financing arm, CAF, is expected to witness weak earnings growth in the coming years due to slim securitization spreads, limited origination growth, and likely unsustainably low loan losses.However, BofA analysts also highlight potential risks for AutoNation, including a decline in GPUs as the environment normalizes and the headwin","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","LU0310800965.SGD":"FTIF - Templeton Global Balanced A Acc SGD","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","LU0106831901.USD":"贝莱德世界金融基金A2","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","BK4588":"碎股","LU0648000940.SGD":"Natixis Harris Associates Global Equity RA SGD","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","BK4503":"景林资产持仓","BK4207":"综合性银行","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU0971096721.USD":"富达环球金融服务 A","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU1718418525.SGD":"JPMorgan Investment Funds - Global Select Equity A (acc) SGD","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LU0149725797.USD":"汇丰美国股市经济规模基金","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","BK4548":"巴美列捷福持仓","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU1496350171.SGD":"FRANKLIN DIVERSIFIED BALANCED \"A\" (SGDHDG) ACC","LU1496350502.SGD":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","BAC":"美国银行","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","BK4553":"喜马拉雅资本持仓","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","CVNA":"Carvana Co.","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4585":"ETF&股票定投概念","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","AN":"车之国公司","BK4534":"瑞士信贷持仓","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","KMX":"车美仕","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC"},"translate_title":"美国银行：二手车市场紧张有利于AutoNation而不是CarMax","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BAC":1,"AN":1,"CVNA":1,"KMX":1},"content_text":"Investing.com - Bank of America (NYSE:BAC) (BofA) analysts have expressed their preference for AutoNation Inc (NYSE:AN) over CarMax Inc (NYSE:KMX) in a research note on Thursday.\nThe sourcing environment for used cars, particularly late-model used vehicles, remains challenging, a trend expected to persist through 2025 and beyond. This dynamic is likely to impede CarMax's same-store unit growth.\nCarMax is facing increased competition from franchised dealers and Carvana Co (NYSE:CVNA), further exacerbating the issue.\nAs volume leverage fails to materialize, CarMax is also grappling with inflated costs. Unlike franchised dealers, CarMax has limited means to counter the challenging used car market.\nThe company's financing arm, CAF, is expected to witness weak earnings growth in the coming years due to slim securitization spreads, limited origination growth, and likely unsustainably low loan losses.\nOn the other hand, AutoNation is poised to benefit from an improving new vehicle sales cycle, driven by pent-up demand, and continue to generate strong cash flow. The firm is also likely to benefit from a push by Original Equipment Manufacturers (OEMs) for larger dealer groups, growth in trade-ins as new vehicle sales improve, an increase in customer wallet share, and strong cost management.\nHowever, BofA analysts also highlight potential risks for AutoNation, including a decline in GPUs as the environment normalizes and the headwind of SG&A deleveraging as grosses come down. Despite these challenges, AutoNation is expected to mitigate these headwinds with efficient cost management.\nFor CarMax, BofA slightly lowered its estimates to account for weaker than expected CAF collateral spreads in the most recent ABS securitization.\nThe firm maintains its price target for CarMax at $50.\nRelated Articles\nBofA: Tight used car market favors AutoNation over CarMax\nRoaring Kitty nearly doubles GameStop holdings to 9 million shares, Reddit post shows\nAdobe raises full-year revenue forecast on robust software demand","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2443651124"}