CASY - Casey's: Watch For Signs Of Economic Weakness (Rating Downgrade)
2024-06-10 04:45:58 ET
Summary
- Casey's General Stores operates convenience stores that double as liquor stores and pizza chains, with a focus on rural areas.
- A recent dip in fuel margin mirrors slowing U.S. GDP growth, raising concerns about the upcoming quarterly earnings report.
- While I like the company's long-term growth profile, I recommend investors trim their expectations as fuel margins may decline in the upcoming quarters due to weakening consumer demand.
It has been a few months since I last wrote about Casey's General Stores ( CASY ), one of my favorite retailers in the equity markets. Casey's is a classic growth-at-a-reasonable-price ("GARP") story, with consistent unit and same-store sales growth powering double-digit earnings growth. Since my last update, Casey's shares have delivered almost 20% in total returns to investors (Figure 1).
Figure 1 - CASY has delivered 20% total returns since September (Seeking Alpha)