Market reaction to 2Q18 results

Casey’s General Stores’ (CASY) stock price fell 11.6% and closed at $107.18 in the trading session after its 2Q18 results. As we discussed, the company missed earnings and revenue expectations during the quarter. Casey’s is sitting at a YTD (year-to-date) loss of ~10%.

In comparison, convenience store player Murphy USA (MUSA) managed to be in the green with YTD gains of 25%.

Casey’s Stock Fell 11% after Weak 2Q18 Results

Wall Street’s recommendations

Casey’s was downgraded by Raymond James after the results. The brokerage house lowered the company to a “market perform” from an “outperform” rating. The other analysts maintained their stance on the company.

As a result of the downgrade, Casey’s rating fell from 2.3 to 2.4. Ratings are done on a scale of 1 (strong buy) to 5 (sell).

Casey’s is covered by 13 Wall Street analysts. Of the analysts, 38% recommended a “buy,” while 62% recommended a “hold.” There weren’t any “sell” recommendations.

William Blair, Jefferies, and Bank of America are among the brokers who recommended buying the stock, while Barclays and RBC Capital suggested holding it.

The average price target for Casey’s stock is $118.80. It indicates an upside potential of ~10% over the next 12 months. Competitor Murphy USA (MUSA) is trading around its target price without any upside. Currently, it’s rated a 2.6 with 38% “buy,” 50% “hold,” and 13% “sell” recommendations.

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