CarMax (KMX) appears to be in the early stages of a turnaround but progress could be "bumpy," with further details on growth initiatives and milestones under wraps until the company's fall investor event, UBS Securities said in a note Monday.

The brokerage noted the company's increasing vehicle units in each fiscal year, buoyed by early progress across its pricing, marketing and conversion initiatives. Fiscal Q1 used vehicle gross profit per unit, or GPU, also beat the company's projection, UBS added.

CarMax, however, still expects fiscal 2027 margin concession, along with a $200 reduction in GPU, to support sales growth, the brokerage noted.

The brokerage increased its fiscal 2027 earnings per share forecast for CarMax to $2.72 from $2.29.

UBS Securities raised its price target on CarMax to $57 from $42, with a neutral rating.

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