Caseys General Stores Inc (NASDAQ:CASY) stock fell 0.33% (As on January 13, 11:12:57 AM UTC-4, Source: Google Finance) after BofA initiated coverage of the company with a Buy rating and $700 price target. The firm’s target multiple is set at a premium to convenience store peers as BofA argues that it is “worth paying for” given Casey’s focus on higher margin foodservice and consistent EBITDA growth. Analyst Lisa Lewandowski based the price target on 15.9x FY27 estimated EV/EBITDA, which sits modestly above the company’s one-year average of 15.1x and represents a premium to convenience store peers trading at approximately 10x. Casey’s current EV/EBITDA ratio stands at 18.26x. BofA Securities views the premium valuation as justified given Casey’s focus on higher-margin foodservice offerings and its consistent EBITDA growth of over 8%. The research firm noted that Casey’s is one of only three peers to achieve 8%+ EBITDA growth over the 1-year, 5-year, and 10-year periods.

While fuel represented 61% of Casey’s FY25 sales, BofA highlighted that 70% of inside transactions do not include gas purchases, suggesting the store itself serves as a destination for customers beyond fuel needs. The company has maintained dividend payments for 37 consecutive years, with 26 years of consecutive dividend increases, demonstrating long-term financial stability.

Meanwhile, For the three months ending Oct. 31, Casey’s General Stores Inc. reported net income of $206.3 million for its 2026 second quarter, up 14% from the same period last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $410.1 million, up 17.5% from the same period a year ago. Net income and EBITDA increased compared to the same period a year ago due to higher inside and fuel gross profit, partially offset by higher operating expenses, primarily due to operating 236 additional stores. As a result of the strong financial performance year to date, Casey’s expects fiscal 2026 EBITDA to increase 15% to 17%. In addition, total inside gross profit increased 13.5% to $703.4 million compared with the prior year. Inside same-store sales increased 3.3% compared with the prior year and 7.5% on a two-year stack basis, with an inside margin of 42.4%. Total inside sales for the quarter were up 13% compared with the prior year. For fiscal 2026, Casey’s expects inside same-store sales to increase 3% to 4% and an inside margin of 41% to 42%.