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On Wednesday, Evercore ISI initiated coverage on Casey’s General Stores (NASDAQ:) with an optimistic outlook, assigning an Outperform rating on the stock and setting a price target of $345.00. The firm highlighted Casey’s strong position to capitalize on its scale and the potential to further consolidate the convenience store market, which is valued over $300 billion excluding fuel sales.
Casey’s, ranking third with a 2% market share, is seen as well positioned to benefit from its size in a highly fragmented industry consisting of approximately 150,000 stores. Evercore ISI’s projections exceed the consensus, anticipating the company to experience robust store growth, increased market share, and enhanced pricing power.
The analysis by Evercore ISI includes a detailed look at Casey’s store growth opportunities and consumer spending intentions, as well as a comparison of margins and drivers with competitors such as Domino’s Pizza (NYSE:) and Papa John’s (NASDAQ:). This research is aimed at addressing concerns regarding fuel profits, the impact of electric vehicles, tobacco, and GLP-1 treatments, suggesting that these potential issues are manageable.
Evercore ISI’s valuation is based on a 23 times price-to-earnings ratio for the calendar year 2025, with Casey’s expected to maintain an 8-10% compound annual growth rate in EBITDA. This growth trajectory is projected to support continued stock performance in what is described as a large and fragmented industry.
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