Casey’s General Stores Stock Gains Another Bull

Casey’s Basic Shops (CASY) has gained one other bull.

KeyBanc Capital Markets on Thursday initiated protection of the Iowa-based fuel station and comfort retailer chain at “overweight” with a $500 value goal. It’s the highest of the 5 present value targets tracked by Seen Alpha, which has a consensus of $468.50.

Casey’s Basic Shops shares added over 4% Friday to shut at $457.25 amid broader market positive factors. They’ve risen practically 50% over the previous 12 months.

KeyBanc analysts wrote that Casey’s could scoop up extra opponents—it has acquired practically 470 shops up to now 5 years—and bolster their gross sales by introducing pizza and ready meals. “Looking forward, we see balanced growth driven from organic store openings, small acquisitions … and (at a store level) from its investments in its food innovation pipeline,” the analysts stated.

Comfort Retailer Sector ‘Has Little Direct Tariff Threat,’ KeyBanc Says

The comfort retailer business, which KeyBanc estimates generated 2024 gross sales of $825 billion, “has little direct tariff risk,” it stated. However the area can also be fragmented and ripe for consolidation, with KeyBanc estimating 75% of chains could exit of enterprise or be acquired by opponents.

A lot of the gross sales progress within the fuel station sector has come in recent times from snacks, drinks, tobacco and gadgets bought inside comfort shops, KeyBanc stated, including that that is Casey’s power. The corporate is the fifth-largest pizza chain within the U.S. and rising, analysts stated.

“Despite being a convenience store and operating in rural and lower-population markets, Casey’s prepared food business produces impressive volume, with (average unit volume) better than Subway,” the notice stated, including: “Its food innovation pipeline is also gaining sophistication and should drive comp growth.”

With pizza costs $1 or $2 beneath opponents, Casey’s could attract prospects in search of worth, the analysts stated. CEO Darren Rebelez stated Casey’s desires to make inroads with folks trying to save and has seen lately seen prospects choose baked items over high-priced sweet.