Stock markets declined following a higher-than-expected CPI inflation report. Five stocks were added to the Zacks Rank #1 (Strong Buy) list today, including CarMax, American Coastal Insurance, BeOne Medicines, Oddity Tech, and Western Midstream Partners, based on increased earnings estimate revisions over the last 60 days.

Stock markets declined following a higher-than-expected CPI inflation report. The article highlights three Zacks Rank #1 stocks with strong value characteristics: CarMax (automotive retail), American Coastal Insurance (property and casualty insurance), and ZIM Integrated Shipping Services (container shipping), all trading at valuations below their respective industry averages.

Recent economic data shows PCE inflation came in softer than expected while Q2 GDP exceeded expectations. All market attention is now focused on Friday's employment report, which will be a key indicator for future economic policy decisions.

CarMax reported strong Q2 earnings with revenue up 19.5% YOY and EPS up 81.2%, but the stock fell 7% the day after the announcement, closing below its pre-earnings price. The company's new CEO implemented a competitive pricing strategy that increased unit sales and average selling prices while reducing per-unit margins. Earnings growth was driven by expanded auto financing (including Tier 2 borrowers), higher service revenues, and lower operating expenses. Despite the stock's recent volatility, analysts view CarMax as an improving turnaround play benefiting from regulatory changes and operational improvements.

CarMax reported Q2 fiscal 2027 earnings of $1.16 per share, up 81.3% year-over-year, beating consensus estimates. Retail used-unit sales climbed 13.8% with average selling prices rising 6.3% to $27,623. CarMax Auto Finance income jumped 32.1%, while SG&A per unit fell 8.8%. The company plans to resume share repurchases in Q3.

Several companies reported earnings results with mixed market reactions. Carnival Corp. surged 13.4% after beating earnings estimates, while CarMax climbed 4.7% on strong results. Vail Resorts rose 2.3% despite posting a loss narrower than expected. Fair Isaac Corp. plunged 26.5% following regulatory changes to mortgage pricing by the Federal Housing Finance Agency.

Pre-market futures opened moderately higher on September 29, 2026, following a slow week. Case-Shiller reported July home prices up 1.9% year-over-year, marking the 14th consecutive decline in real home prices when adjusted for inflation. CarMax exceeded earnings expectations with a 70.6% surprise, posting $1.16 EPS and $7.88B in quarterly revenue. Bond yields remain elevated near 2008 crisis levels, while oil prices cooled. JOLTS data and Consumer Confidence readings are expected later today.

CarMax reported quarterly earnings of $1.16 per share, significantly beating the consensus estimate of $0.68 and delivering a 70.59% earnings surprise. The company also exceeded revenue expectations with $7.88 billion, up from $6.59 billion year-over-year. However, the stock received a Zacks Rank #3 (Hold) rating, suggesting near-term performance in line with the market. Advance Auto Parts is expected to report weaker results with earnings declining 13% year-over-year.

AutoZone reported Q3 2026 earnings of $56.05 per share, beating consensus estimates of $54.54 by 2.77%, but revenues of $6.59 billion missed expectations by 1.38%. The stock has underperformed the S&P 500 by 30.8 percentage points year-to-date. AutoZone received a Zacks Rank #3 (Hold) rating with mixed estimate revisions, suggesting near-term performance in line with the market.

Petco Health & Wellness reported Q2 2026 earnings of $0.16 per share, significantly beating the consensus estimate of $0.06, representing a 166.67% surprise. However, revenues of $1.49 billion slightly missed expectations by 0.3%. The stock has underperformed the S&P 500 by 19.7% year-to-date and carries a Zacks Rank #3 (Hold) rating. The Retail - Miscellaneous industry ranks in the bottom 15% of Zacks industries, which may constrain near-term performance.

While overall U.S. loan delinquencies declined in Q2 2026, subprime loans remain at multiyear highs, revealing a K-shaped economic recovery where affluent consumers thrive while lower-income households struggle. Mortgage and auto loan delinquencies are rising, with particular pressure on subprime borrowers facing affordability challenges, inflation, and a weakening job market.

CarMax (KMX), a used car dealership chain, has demonstrated a consistent pattern of beating earnings estimates with an average surprise of 46.95% over the past two quarters. The company currently holds a Zacks Rank #2 (Buy) rating with a positive Earnings ESP of +18.39%, suggesting analysts expect another earnings beat in the upcoming quarterly report.