CarMax Credit Exposure Remains Key Concern Amid Mixed Trends, Wedbush Says

MT Newswires Live03-18 23:59

CarMax (KMX) saw mixed credit trends in February as investors remain cautious about the company's credit exposure and turnaround efforts, Wedbush Securities said in a Wednesday note.

Noting CarMax Auto Finance's securitization trust data, the brokerage said delinquency and net loss rates increased month over month, while the extension rate declined.

CarMax priced its 2026-A non-prime transaction in February with a collateral spread of about 4.6%, Wedbush said, adding that excluding the impact of this securitization, the company's portfolio delinquency rate would have declined month over month.

Wedbush said it generally agrees with Starboard Value's proposed changes to improve long-term durability, but views the potential turnaround with caution and continues to see CarMax in a challenging structural position relative to its key peer, Carvana (CVNA).

The firm maintained its neutral rating with a $36 price target.

Price: 42.40, Change: +0.07, Percent Change: +0.17

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