KMX Stock Gets Shaken: Wall Street Slashes Price Target on CarMax

CarMax (NYSE:KMX) is facing fresh skepticism from the analyst community. The consensus one-year price target for the used-car retailer has been dramatically downgraded to $44.20 per share, marking a sharp 22.30% decline from the previous forecast of $56.88 issued on November 7, 2025. Current analyst estimates swing wildly—ranging from as low as $25.25 to as high as $114.42—reflecting deep disagreement about the company’s near-term prospects.

Despite the grim revision, there’s still a glimmer of optimism baked into the numbers. At the latest closing price of $34.43, the new $44.20 target suggests a potential upside of 28.37%, which explains why some bulls haven’t completely abandoned the stock.

What’s the Real Story Behind the Numbers?

The institutional picture is particularly revealing. A total of 1,254 funds and institutions hold positions in CarMax, though that’s down 87 stakeholders (6.49%) over the last quarter—a telling sign of reduced institutional interest. The average fund portfolio allocation to KMX stands at 0.23%, up 13.10%, while total institutional shares declined 7.80% to 174,021K shares.

The put/call ratio of 0.58 hints at a mildly bullish sentiment in the options market, suggesting that traders haven’t entirely lost faith despite the analyst downgrade.

Major Players Are Quietly Retreating

The moves by heavyweight shareholders tell a more sobering tale:

Vanguard’s Total Stock Market Index Fund holds 4,892K shares (3.33% ownership), up slightly from 4,890K shares previously, but the fund has trimmed its KMX allocation by 23.02% over the quarter.

Janus Henderson Group maintains 4,875K shares (3.32% ownership), marking a marginal 0.96% increase in holdings, yet the firm reduced its relative portfolio weight by a striking 75.81%—the steepest pullback among major holders.

Diamond Hill Capital Management controls 4,833K shares (3.29% ownership), but this masks a 44.04% absolute decline in shares held since the prior quarter. Its portfolio weighting in KMX dropped 52.13%.

Primecap Management owns 4,560K shares (3.11% ownership), down 3.89% from 4,738K shares, with portfolio allocation cut by 37.90%.

Vanguard’s 500 Index Fund holds 4,324K shares (2.94% ownership), marginally higher than the 4,272K previously held, yet also slashed its KMX weighting by 22.44%.

The Takeaway

The divergence between modest share accumulation by some mega-funds and their aggressive reduction in portfolio weightings is striking. It suggests that while institutional money may be mechanically adding positions through index tracking, the active money is clearly headed for the exits. The $44.20 price target may offer some hope, but the voting with feet by serious capital managers suggests caution is warranted before catching this falling knife.