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What Do Analysts Think About Casey's General Stores, Inc.'s (NASDAQ:CASY) Future?

Simply Wall St

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On 30 April 2019, Casey's General Stores, Inc. (NASDAQ:CASY) released its earnings update. Generally, it seems that analyst expectations are fairly bearish, with earnings expected to grow by 6.4% in the upcoming year against the higher past 5-year average growth rate of 13%. With trailing-twelve-month net income at current levels of US$204m, we should see this rise to US$217m in 2020. Below is a brief commentary on the longer term outlook the market has for Casey's General Stores. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Casey's General Stores

What can we expect from Casey's General Stores in the longer term?

The longer term expectations from the 12 analysts of CASY is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for CASY, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NasdaqGS:CASY Past and Future Earnings, July 1st 2019

This results in an annual growth rate of 6.2% based on the most recent earnings level of US$204m to the final forecast of US$245m by 2022. EPS reaches $6.72 in the final year of forecast compared to the current $5.55 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 2.4% to 2.2% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Casey's General Stores, I've compiled three fundamental aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Casey's General Stores worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Casey's General Stores is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Casey's General Stores? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.