After Casey’s General Stores, Inc.’s (NASDAQ:CASY) earnings announcement on 31 January 2019, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 1.5% in the upcoming year relative to the higher past 5-year average growth rate of 16%. Currently with trailing-twelve-month earnings of US$318m, we can expect this to reach US$323m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Casey’s General Stores in the longer term?
The longer term view from the 11 analysts covering CASY is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of CASY’s earnings growth over these next few years.
This results in an annual growth rate of 5.9% based on the most recent earnings level of US$318m to the final forecast of US$365m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $6.45 in the final year of forecast compared to the current $8.41 EPS today. However, the expansion of the current 4.3% margin is not expected to be sustained, as it begins to contract to 3.7% by the end of 2022.
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 important factors you should look at:
- 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.
- 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.
- 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 firstname.lastname@example.org. 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.