3 Reasons Casey’s General Stores Will Continue Trending Higher

Core Viewpoint - Casey's General Stores' stock price is expected to trend higher due to strong growth prospects, healthy cash flow, and broad market support, despite current valuation concerns [2][3]. Group 1: Financial Performance - Casey's General Stores reported a solid fiscal Q2 with net revenue of $4.51 billion, reflecting a year-over-year growth of 14.2%, driven by new-store growth and comparable store sales [5]. - Inside sales increased by 13%, with inside comparable sales up by 3.3% and fuel gallon comparable sales up by 0.8% [6]. - The company achieved an EBITDA increase of 17.5%, with net income and GAAP earnings rising by 14%, resulting in a GAAP EPS of 33 cents, which exceeded market expectations by 630 basis points [7]. Group 2: Cash Flow and Capital Returns - Casey's generates substantial free cash flow, supported by operational efficiency and a strong balance sheet, with total liabilities at 1.25 times equity and rising shareholder equity [8]. - Shareholder equity increased by 8% year-to-date, alongside dividend payments and share buybacks, indicating a commitment to returning value to shareholders [8]. Group 3: Market Support - The stock is trading at approximately 10 times its 2035 earnings outlook, suggesting a potential 100% upside in stock price over the coming years, supported by institutional and analyst backing [3]. - The overall market sentiment is positive, with a tendency toward accumulation of Casey's stock, which is expected to drive further price appreciation [3].