Market Overview

Casey's General Stores Analyst Says Q3 Print Shows Progress In Growth Initiatives

Casey's General Stores Analyst Says Q3 Print Shows Progress In Growth Initiatives

Casey's General Stores Inc (NASDAQ: CASY) delivered strong third-quarter operating results Monday, indicating early progress with its initiatives to drive growth by enhancing store-level performance while reallocating capital to increase shareholder value, according to RBC Capital Markets.

The Analyst

RBC Capital Markets’ Irene Nattel maintains a Sector Perform rating on Casey's General Stores with an unchanged $139 price target.

The Thesis

Casey's General Stores reported third-quarter EPS of $1.13, in-line with consensus expectations. Although the performance of individual segments fluctuated, the company’s overall operating results for the quarter were solid, Nattel said in a Monday note. 

Gross profit in the fuel segment was slightly lower than expected. Although gas margins were favorable, weekly volatility makes forecasting difficult, the analyst said. 

Casey’s is still in the initial stages of enacting gas price optimization strategies and is trying to find a balance between proactive fuel pricing and gas volumes, Nattel said.

“Although CASY should benefit from the rollout of a fuel price optimization strategy in the fourth quarter, the process can be bumpy." 

The company’s grocery and other merchandise stores delivered strong performance, the analyst said. Casey’s once again exhibited opex control, with growth of 5.7 percent in the third quarter versus the forecast of 7.7 percent, which helped its EPS performance, she said. 

Price Action

Casey's General Stores shares were up 2.79 percent at $134.95 at the time of publication Tuesday. 

Related Links:

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Earnings Scheduled For March 11, 2019

Latest Ratings for CASY

Apr 2019Initiates Coverage OnNeutral
Dec 2018MaintainsEqual-WeightEqual-Weight
Dec 2018MaintainsMarket PerformMarket Perform

View More Analyst Ratings for CASY
View the Latest Analyst Ratings

Posted-In: Irene Nattel RBC Capital MarketsAnalyst Color Earnings News Price Target Reiteration Analyst Ratings Best of Benzinga


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