CASY - Casey's General Stores upgraded to Neutral as JP Morgan eyes easing inflation

JP Morgan stepped away from a bearish rating on Casey’s General Stores ( NASDAQ: CASY ) as underperformance for the stock in 2023 has baked in much of the downside.

Equity John Royall indicated that about a 6% drop for shares of the Iowa-based convenience chain has balanced the risk-reward dynamic for the stock. Additionally, slowing inflation into 2023 is expected to stabilize the stock in 2023.

“On [Casey’s General Stores] ( CASY ) and [Murphy USA] ( MUSA ), we think valuation levels are currently reflective of historical medians, while we think [Alimentation Couche-Tard] ( OTCPK:ANCTF ) still screens relatively inexpensive,” he told clients. “We think CASY has generally underperformed due to its group high exposure to opex (the ‘bad news’ since the onset of COVID) and its group low exposure to fuel margin (the ‘good news’). With inflation slowing, we think investors will become more willing to take a position in CASY.”

Royall upgraded the stock from Underweight to Neutral and assigned a $211 price target to the stock. Murphy USA ( MUSA ) was also retained at a Neutral rating while ATD was issued an Overweight rating.

Casey’s General Stores due to post its fiscal third quarter results on Tuesday .

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