CarMax (KMX) is expected to report higher comparable sales in Q2 amid tough competition, Truist Securities said in a preview note Monday. The results are due on Sept. 29.

The report said Q2 unit comparable sales growth forecast is raised to 9% from 7%, and against a market consensus of 5.5%.

"While the company appears to be experiencing positive elasticity as it focuses on providing more value for consumers, we continue to believe they are in a difficult competitive

position," the report said.

The note said the firm is caught between Carvana (CVNA), which has gained substantial "mind share" for consumers looking for a fully on-line transaction experience and more traditional dealers.

Truist maintained its hold rating and a $50 price target.

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