Morgan Keegan Reports Casey's General Stores Maintains Outperform Rating

In a report published by Morgan Keegan, Casey's General Stores CASY maintain its Outperform rating.

Morgan Keegan said that diluted EPS from continuing ops of $0.36 fell short of its $0.47 estimate, consensus of $0.50 and compared to $0.34 last year. “Earnings were impacted by LIFO charges (~$0.02 y/y), higher commodity costs and increased credit card/fuel expenses (~$0.10 y/y). Cost pressures related to fuel/commodities will be a headwind for most retailers and we will likely lower our quarterly estimates following the earnings call. On a positive note, Q3 posted record fuel margins, management believes they are gaining market share, a record number of acquisitions completed in Q3 should be highly accretive as CASY's foodservice is implemented, and we believe the difficult environment may prove a favorable backdrop for acquisition multiples/growth prospects.”

Casy's General Store closed yesterday at $40.55.