On Monday, Evercore ISI announced an increase in the price target for Casey's General (NASDAQ:CASY) shares, from $345.00 to $370.00, while maintaining an Outperform rating on the stock. Following a visit with the company's management, including CEO Darren Rebelez and CFO Steve Bramlage, analysts expressed reinforced confidence in the company's prospects.
The visit provided an in-depth look at Casey's store experience, leadership, and culture, which underpinned the analysts' positive view. The management's approach to offering distinctive prepared food options, combined with the experience of the leadership team, is expected to help Casey's General Stores capture a larger market share.
Additionally, the potential for accretive mergers and acquisitions was noted as a factor that could further enhance the company's market position.
Despite acknowledging risks such as the potential for fuel price spikes, volatility among low to middle income consumers, and increasing cheese prices, Evercore ISI believes Casey's is well-equipped to navigate these challenges.
The company's value proposition compared to quick-service restaurants (QSRs) is seen as favorable, which supports the company's ability to manage headwinds.
The revised price target of $370 is based on a multiple of 24.5 times the projected calendar year 2025 earnings per share (EPS). This valuation sits at the higher end of Casey's historical premium range of 20-30% over the S&P 500, which is justified by the company's share gain and characteristics as a defensive compounder, according to Evercore ISI.
In their report, the analysts also highlighted key takeaways from their question and answer session with management and from their store tours, which contributed to their positive outlook on the stock.
InvestingPro Insights
Casey's General Stores (NASDAQ:CASY) has demonstrated a robust financial performance with a market capitalization of $12.5B. The company's dedication to shareholder returns is evident, as it has raised its dividend for 35 consecutive years, showcasing its commitment to consistent and reliable payouts. This has been complemented by a strong return over the last three months, with a 20.45% price total return, and an impressive 43.91% return over the past year, reflecting the company's market resilience and investor confidence.
InvestingPro data also highlights Casey's trading near its 52-week high, at 99.95% of the peak price, which aligns with Evercore ISI's increased price target. The company's P/E ratio stands at 26.55, which indicates a premium valuation that investors are willing to pay for its earnings. This is supported by an InvestingPro Tip that Casey's is trading at a high P/E ratio relative to near-term earnings growth, implying expectations of robust future performance.
For investors seeking further insights and additional InvestingPro Tips for Casey's General Stores, there are 10 more tips available that can help in making informed investment decisions. To access these tips, visit: https://www.investing.com/pro/CASY. Additionally, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of financial data and expert analysis.
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