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UPDATE: J.P. Morgan Initiates Coverage on CST Brands as Industry Trends Towards Non-Fuel Margin Growth

Earnings Scheduled For August 7, 2015
Earnings Scheduled For February 27, 2015

In a report published Monday, J.P. Morgan analyst Katherine Lucas Minyard initiated coverage on CST Brands (NYSE: CST) with an Overweight rating and $39.00 price target.

In the report, J.P. Morgan noted, “We are initiating coverage of two independent convenience store operators, CST Brands and Murphy USA. Against a backdrop of stagnant gasoline demand and volatile fuel margins, the industry appears to be focused on growing higher-margin, in-store convenience merchandise through larger store formats. We launch with an OW rating on CST, with 19% upside to our YE14 PT and a N rating on MUSA, with current price levels largely reflecting fair value, in our view. We prefer CST's growth story, with new format stores driving margin growth over time and reducing the company's dependence on fuel margins. Although MUSA offers a relatively low-risk expansion story and continued dependence on fuel margins, we believe this outlook is largely priced into the stock.”

CST Brands closed on Friday at $32.70.

Latest Ratings for CST

Sep 2015JP MorganMaintainsNeutral
Jul 2015Stephens & Co.Initiates Coverage onOverweight
Jun 2015JP MorganMaintainsNeutral

View More Analyst Ratings for CST
View the Latest Analyst Ratings

Posted-In: J.P. Morgan Katherine Lucas MinyardAnalyst Color Initiation Analyst Ratings


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