Wall Street’s view on CASY
In this final part of the series, we’ll look at Wall Street’s recommendations on Casey’s General Stores (CASY) and any rating changes that followed the company’s fiscal 3Q17 results.
CASY is rated by 13 Wall Street analysts, who have jointly rated the stock a 1.8 on a scale of 1 (strong buy) to 5 (sell). The company has a better rating than its peers Murphy USA, Kroger (KR), and SuperValu (SVU), which are rated 1.9, 2.2, and 2.6, respectively.
Analyst actions after 3Q17 results
After delivering a revenue and profit miss in fiscal 3Q17, Casey’s General Stores was downgraded by RBC Capital from an “outperform” to a “sector perform” rating. The price target was also revised down to $123.00 from $136.00.
Currently, nine of the 13 analysts rate the retailer as a “buy,” while four have set a “hold” rating. None of the analysts, however, think Casey’s General Stores is a “sell” right now. The company’s convenience store peers Murphy USA and CST Brands (CST) also do not have any “sell” ratings.
Analyst ratings and target price
On March 7, 2017, Casey’s General Stores stock was currently trading at $109.78, which is 21% below its 52-week high price. Wall Street expects the stock price to touch $130.69 within the next year, which indicates an upside of 19% on its current stock price.
Murphy USA, which has already gained 7.2% this year, is expected to gain another 17% in the next 12 months.
CST Brands, however, already seems to be trading at its right price. Analysts do not expect any price increase for this stock.
Casey’s General Stores (CASY) is currently trading at a one-year forward price-to-earnings (or PE) ratio of 20.9x, operating in the middle of its 52-week PE range of 18.0x–23.3x.
The company is cheaper than CST Brands, which is valued at 29.2x. Murphy USA, however, continues to trade at a discount and is valued at 14.2x its next 12 months’ earnings.
Investors looking for exposure to Casey’s General Stores through ETFs can invest in the First Trust Consumer Staples AlphaDEX ETF (FXG). CASY makes up 0.75% of FXG.