Analyst upgrades drive 13% CarMax rebound as Stephens turns bullish with $66 target

The wild two-day swing in CarMax — from a 9% post-earnings selloff to a 13% surge — encapsulates the power of sell-side sentiment in auto retail. For investors, the divergent price targets (from $38 at J.P. Morgan to $66 at Stephens) expose a rare risk/reward chasm that demands a deep dive into the assumptions driving each call.

CarMax shares surged 13% on Thursday, June 18, 2026, snapping back from a 9% rout the previous session, after a parade of post-earnings analyst notes turned decisively bullish. The catalyst was a recommendation upgrade from Stephens analyst Jeff Lick, who lifted his rating to Overweight (Buy) from Equal Weight and dramatically raised his price target to $66 from $43. That shift crowded out more cautious calls — J.P. Morgan inched its target to $38 but stayed Underweight, while Baird hiked to $55 with an Outperform rating — and signaled that at least one influential research house believes the used-car leader can fend off macro headwinds.

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The catalyst was a recommendation upgrade from Stephens analyst Jeff Lick, who lifted his rating to Overweight (Buy) from Equal Weight and dramatically raised his price target to $66 from $43.

The rally reversed the market’s initial, skeptical reaction to CarMax’s first-quarter fiscal 2027 results, released before the bell on June 17. Despite posting a 6% year-over-year revenue gain and beating consensus on both the top and bottom lines, the stock sank 9% on Wednesday. The discrepancy highlights the razor-thin line that consumer-discretionary retailers now walk: rising interest rates and persistent inflation have squeezed affordability for big-ticket purchases, and any whiff of decelerating demand gets punished. CarMax’s 6% revenue expansion in that environment, however, was no mean feat — it suggested that the company’s omnichannel approach and dominant share of the fragmented used-car market are providing genuine insulation.

The used-vehicle industry has been navigating a series of shockwaves since the pandemic. A global chip shortage throttled new-car production, sending buyers into the used lot and inflating prices to record levels. But as manufacturing normalized, used-vehicle values began to retreat, and the Federal Reserve’s rate-hiking campaign made financing more expensive. CarMax, with its in-house financing arm and large inventory footprint, has historically outperformed smaller peers during downturns because it can price competitively and still earn a spread on loans. Yet the market’s Wednesday thrashing reflected concerns that even CarMax’s model would buckle if consumer credit quality deteriorated or trade-in values fell further.

That’s what made Jeff Lick’s upgrade so potent. In his note, Lick argued that CarMax can remain the No. 1 used-car retailer in the country and, even if its market position softened slightly, it would remain the go-to destination for many buyers. By vaulting his price target to $66 — a level that implies upside of more than 25% from the stock’s depressed pre-bounce levels — he effectively dismissed the bear case. Baird’s reiteration of Outperform with a $55 target lent further credibility to the bull camp, while J.P. Morgan’s token $1 raise to $38, still carrying a sell-equivalent rating, underscored the wide dispersion of opinion that often accompanies cyclical stocks at inflection points.