Why CarMax (KMX) Stock Is Up Today

What Happened?

Shares of used automotive vehicle retailer Carmax (NYSE:KMX) jumped 3% in the morning session after JPMorgan upgraded the stock's rating to "Neutral" from "Underweight". The investment bank indicated a less negative outlook on the used-car retailer. Concurrent with the upgrade, JPMorgan lowered its price target on CarMax shares to $58 from a previous target of $65. Despite the reduction in the price forecast, the improved rating from "Underweight" was the likely catalyst that pushed the stock higher.

After the initial pop the shares cooled down to $56.33, up 0.4% from previous close.

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What Is The Market Telling Us

CarMax’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 26 days ago when the stock dropped 3.6% on the news that the Trump administration announced intentions to impose a 35% tariff on many goods imported from Canada. This move is far more than a typical trade dispute; it targets the United States' largest and most deeply integrated trading partner. Canada is not merely a neighbor but a critical component of North American supply chains, particularly in sectors like automotive, energy, and critical minerals. This move has sparked concerns about potential retaliatory actions and a wider impact on the North American economy, leading to a risk-off sentiment among investors. The S&P 500, Dow Jones Industrial Average, and Nasdaq all opened lower, pulling back from recent record highs and heading for their first weekly loss in three weeks.

CarMax is down 30.7% since the beginning of the year, and at $56.33 per share, it is trading 36.8% below its 52-week high of $89.19 from February 2025. Investors who bought $1,000 worth of CarMax’s shares 5 years ago would now be looking at an investment worth $559.61.

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