Needham downgraded CarMax (KMX) to Hold from Buy. The firm’s previous bullish thesis was underwritten by a return to growth in units, leveraging their position as the industry leader in used auto, but a choppy macro recovery and intensifying competition from digital only players has pushed unit growth back into negative territory, the analyst tells investors. While a new CEO and a refreshed strategy have the potential to drive increased investor enthusiasm, the firm sees “a prolonged period of uncertainty as the most likely near-term outcome,” the analyst added.
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