CarMax (KMX) is well-positioned for the upcoming tariffs of the Trump administration, with potentially a path to 2026 earnings of as much as $6 per share in a bull case scenario, Wedbush said in a Tuesday note.

Wedbush analysts said that a positive tax refund season, with refunds up by 6% season-to-date, is helping sustain industry used sales growth.

While tariffs can pressure consumer confidence and spending power, it could benefit from higher car prices, the analysts said.

If prices rise 5% to 6% for new cars and 1% for used cars, its comps could increase by 500 basis points to some 10% as consumers trade down to late-model used vehicles, they said.

"With a likely solid 4Q print, a favorable update on recent trends and potential for accelerating share gains in a rising market and on the back of new vehicle tariffs creates a positive risk/reward for KMX into 4Q earnings," the analysts said.

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