Benchmark Raising Estimates On The Pantry

Benchmark Capital is raising its estimates on shares of The Pantry, Inc.

. It has a Buy rating and a $24.50 price target on shares. In a note to clients, Benchmark Capital writes, "We increased our EPS estimate for 3Q11 to $1.24, from $0.98, as a sharp decline in fuel prices tends to lead to fuel margin expansion. Management also recently changed focus at the pump with help from a new fuel pricing program, improving the profit per gallon in Q2 by 40%, from Q1, despite a challenging rising commodity cost environment. We calculate that the profit per gallon in the back half of Q2 may have been $0.18. We believe when you combine the benefits of the Company's new gas pricing system installed last December, with this declining fuel price environment, fuel margins could average $0.17 for the quarter, up from our prior $0.15 per gallon estimate. When selling an estimated 494 million gallons in the quarter, we believe this could drive our new estimate of $1.24 per share, versus $0.94 last year. News media reports that we could continue to see a falling fuel price environment through September, which would be beneficial to fuel margins in Q4, although the data for the first week of July has shown an increase in the price per gallon." Shares of PTRY lost 14 cents yesterday to close at $18.16, a loss of 0.77%.