Casey's General Stores Seen Pursuing Another Deal — Market Talk

(14:33 GMT) Casey's General Stores Price Target Raised to $591.00/Share From $570.00 by RBC Capital

Reported FY25 net income of $546.5M and EBITDA of $1.2B, with strong free cash flow and margin expansion. Strategic plan targets 8-10% EBITDA CAGR and ~500 new stores by FY2026, leveraging prepared food and digital investments for growth.

Original document: Caseys General Stores, Inc. [CASY] Slides Release — Dec. 10 2025

By Teresa Rivas

Value, fresh food, and variety have helped usher in a golden age for convenience stores. Casey's General Stores is gunning for the crown.

Ankeny, Iowa--based Casey's is the nation's third-largest convenience store chain and, after 40 years of making pies, its fifth-largest pizza maker. The stock has soared as it expands its nearly 3,000-location footprint, gobbles up market share, and delivers some of the most consistent performance in retail. It isn't done yet.

"It's almost like the Sam Walton playbook in the sense that Casey's focuses on the rural areas, particularly where there's limited competition but still demand," says Markus Hansen, a portfolio manager at Vontobel Asset Management, which holds the stock. "Their difference versus their peers is that they built more slowly but they are consistent in controlling as much of the logistics chain as they can....Today they're setting the standard for the industry."

Casey's distribution network means it can serve far-flung Midwestern communities profitably in ways rivals cannot, giving the company a wider moat than most. At the same time, its prepared food business is one of the best among C-stores.

The upshot is that companies such as Circle K owner Alimentation Couche-Tard are trying to imitate Casey's distribution center success, while privately held Wawa tried to model its own pizza offering on Casey's.

Menu innovation is one reason that Gabelli Funds research analyst Justin McAuliffe is upbeat about the company's ability to differentiate itself and keep adding to its growing pool of loyal customers. He also notes the company's mergers-and-acquisitions strategy as another driver of its success: As economics make it increasingly hard for smaller chains to compete, "the convenience store channel's pain is Casey's gain," McAuliffe says.

Small mom-and-pop C-stores that focus more on gas station services are caught in a vicious cycle where their margins get ever slimmer as they try to keep prices competitive with larger companies that benefit from better economies of scale. As a result, smaller firms are increasingly likely to sell out to a company like Casey's, which has the capital to invest in things like kitchens for freshly prepared foods, apps for online ordering, and loyalty programs. Pizza has been particularly popular amid years of inflation, as it's one of the best values for an easy family dinner.

This means Casey's doesn't have to try as hard to have the lowest gas prices for its locations that sell fuel. The company is "able to maximize its fuel profit dollars, as customers who are drawn to Casey's for food are less likely to shop around for marginal savings on fuel, reducing price sensitivity at the pump," according to Stephens analyst Pooran Sharma. Moreover, "Casey's has benefited from its highest-margin subcategories also being its fastest-growing." Put another way, food that's increasingly bringing people back is also making the company more money.

And in the highly fragmented C-stores business, where even the biggest players control a single-digit slice of the pie, there are plenty of potential targets for Casey's, which has the balance sheet flexibility and experience to make smart acquisitions.

Its most recent major deal was the $1.2 billion purchase of Fikes Wholesale, which closed in November and added nearly 150 stores in the key Texas market, one of the top three states for C-stores.

"If Casey's can replicate the market share that they have in other states, Texas alone could represent about 1,000 stores," says Vontobel's Hansen. "So, Casey's could double the store count over the next decade and still there's room to grow."

Profits are growing at a healthy clip, too, with consensus calling for earnings per share to jump 13% in fiscal 2026, which began in May, to $16.50, and climb more than 11% the following year.

Of course, Wall Street has noticed. Casey's stock has doubled since Barron's highlighted it at the start of 2024, a period when the S&P 500 rose just over 40%. Unlike early last year, the shares now trade at more than 30 times next year's earnings, above their five-year average.

Still, that shouldn't stop the stock. "Even with the multiple expansion over the past year, Casey's remains a scarce growth asset in a challenging retail landscape," writes Sharma.

There are other worries, too. Casey's may benefit from consumers trading down, but a pullback could still hurt sales. Its push into Texas and other areas means it's entering more-competitive regions, and it has to spend heavily to upgrade newly acquired stores.

Yet Casey's valuation reflects "how resilient its earnings are across a spectrum of scenarios; in weaker or stronger macro environments, it looks like Casey's will continue to perform well," says Gabelli's McAuliffe.

Other metrics are moving in the right direction, too, with gross margins, free cash flow, and earnings expanding in recent years.

Hansen, who compares Casey's to Walmart, says it deserves a premium multiple just like that retail giant because both are "doing exactly what is right for this market."

He has also tried Casey's pizza and likes it — and not just grading on a curve for Iowa. The stock can shine on its own merits, too.

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(17:10 GMT) Casey's General Stores Price Target Raised to $600.00/Share From $570.00 by Stephens & Co.

(14:22 GMT) Casey's General Stores Price Target Announced at $600.00/Share by UBS