CASY - Benchmark voices bullishness on Casey's General Stores in 'Buy' initiation

Casey’s General Stores ( NASDAQ: CASY ) is likely to remain resilient amid a market downturn, according to Benchmark Company analyst John Lawrence.

In a note to clients highlighting the name as a new “Buy” rated selection, Lawrence noted the chain’s wide reach across the US, a new distribution center in Missouri, and its strong M&A strategy as keys to further upside. Additionally, the company’s strong margins and private label expansion are likely to insulate the bottom line from erosion, he said.

“The accelerated unit growth strategy, combined with solid initiatives inside the store, provide a higher growth element for the chain,” Lawrence told clients. “Unlike other recessionary periods, management has the private label offering to offer the consumer more value, and the digital program with five million rewards club members enhances the ability to communicate the offerings to its customers.”

A management team that recently added a number of former 7-11 executives to the roster is also projected to aid in expanding and improving in the food service and general merchandise categories.

Lawrence initiated coverage of Casey’s at a “Buy” with a $230 price target.

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