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On Thursday, BMO Capital Markets sustained their Market Perform rating on Casey’s General Stores (NASDAQ:CASY), with a steady price target of $450.00. The convenience store chain, currently valued at $14.77 billion, maintains a strong financial position according to InvestingPro data, with a GOOD overall health score and moderate debt levels. BMO’s analysis acknowledged Casey’s General Stores’ quarterly results, which surpassed expectations, marked by robust mid-single-digit percentage growth in inside comparable store sales. The company’s revenue grew 6.56% over the last twelve months, reaching $15.55 billion. Despite a year-over-year decline in consumer packaged goods (CPG) margins, BMO noted an increase when excluding the dilutive effects of Casey’s recent acquisition.
The commentary from BMO Capital’s analyst, Keely Bania, highlighted the company’s consistent outperformance in the convenience store sector. Bania mentioned the slight year-over-year rise in CPG margins after adjusting for the acquisition’s impact. Bania also indicated tweaks to their financial model, mainly pertaining to the Fikes/CEFCO acquisition, which has been cautiously estimated but is anticipated to contribute more significantly in future quarters.
Casey’s General Stores is also experimenting with adding wings to its already extensive prepared food selection, which BMO suggested as a potential factor to watch. However, the firm’s stance remains at Market Perform, primarily due to valuation concerns.
The report by BMO Capital comes after Casey’s General Stores reported earnings that outstripped forecasts, demonstrating strong performance with diluted earnings per share of $14.35 over the last twelve months. The Fikes/CEFCO acquisition is expected to play a more prominent role in Casey’s financials going forward, as per BMO’s conservative projections. According to InvestingPro, the company has maintained dividend payments for 36 consecutive years, with a 16.28% dividend growth in the last year.
Casey’s General Stores continues to innovate within its product offerings, with the test introduction of wings in its prepared food lineup, which could serve as an additional growth driver for the company. Nevertheless, BMO Capital maintains a cautious outlook on the stock’s valuation, which underpins their Market Perform rating. This aligns with InvestingPro’s analysis indicating the stock is currently overvalued, trading at a P/E ratio of 27.11x. Casey’s General Stores’ stock price target remains unchanged at $450.00 according to BMO Capital’s assessment. For deeper insights into Casey’s valuation and growth prospects, including 8 additional ProTips and comprehensive financial metrics, visit InvestingPro.
In other recent news, Casey’s General Stores reported robust financial results for the first quarter of 2025, with earnings per share (EPS) of $2.33, surpassing the forecasted $2.03. The company’s revenue also exceeded projections, reaching $3.9 billion compared to the anticipated $3.76 billion. This performance was complemented by a 15.3% growth in inside sales, driven by prepared food and energy drinks. Additionally, the effective tax rate decreased to 19.2%, enhancing profitability. RBC Capital Markets responded to these strong results by raising its price target for Casey’s General Stores from $430 to $438, maintaining a Sector Perform rating. The firm’s analyst, Irene Nattel, noted the positive impact of the recent acquisition of Buchanan Energy and its Bucky’s Convenience Stores. Despite these successes, Casey’s General Stores faces potential challenges, including cost pressures and consumer spending concerns in lower-income segments.
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