3 Reasons Casey's General Stores Will Continue Trending Higher

There are three reasons Casey’s General Stores' (NASDAQ: CASY) stock price will likely continue to trend higher despite valuation concerns. The stock isn’t cheap in late 2025, trading at approximately 33 times its current-year earnings. Still, this price reflects a reliable growth trajectory, suggesting deep value for long-term, buy-and-hold investors.

The stock is trading at approximately 10 times its 2035 earnings outlook, suggesting a potential 100% upside in stock price over the coming years. Below, we'll explore three good reasons investors could expect the stock to trend higher in 2026—growth, cash flow and capital returns, and broad market support. 

Reason #1: Casey’s Revealed Momentum in Its FQ2 Report

Casey’s General Stores had a solid fiscal second quarter (FQ2), with earnings results showing strength and momentum, which is expected to carry through to the fiscal year-end. The $4.51 billion in net revenue grew 14.2% year-over-year (YOY), outpacing the consensus by a slim margin, driven by new-store growth and comp-store growth. The store count is up 9% YOY and 0.6% year-to-date (YTD), driven by last year’s Fike’s acquisition.

Strength was seen in both the inside and outside segments, with total inside sales up by 13%, inside comps up 3.3%, and fuel gallon comps up by 0.8%.

Within the Inside segment, both the grocery and prepared foods sub-segments showed strength, including at the margin. 

The company widened its fuel margin, offsetting increased costs in other areas, to maintain a solid margin compared to the prior year. This margin strength led to an EBITDA increase of 17.5%, net income and GAAP earnings increase of 14%, and GAAP EPS of 33 cents.

Notably, the 33-cent EPS was 630 basis points better than MarketBeat’s reported consensus forecast. These results support an improved outlook for full-year profitability, with operating momentum expected to continue into 2026.

Reason #2: Casey’s Generates Healthy Cash Flows and Value

While Casey’s operates with modest margins typical of the retail sector, its operational efficiency and balance sheet strength enable it to generate substantial free cash flow. In FQ2, positive cash flow contributed to balance sheet improvements, with assets growing faster than liabilities. Total liabilities are low at 1.25 times the equity, and equity is rising. Shareholder equity increased by 8% YTD in addition to the dividend payments and share buybacks.

Neither the dividend nor the buybacks could be called aggressive. Rather, they are disciplined and consistent. The 0.4% yield as of mid-December is only 10% of the earnings forecast and expected to grow annually. The company is a Dividend Aristocrat and is on track to extend its streak to 50 years and achieve Dividend King status.

The buybacks are less robust but reduce the count incrementally each quarter. Investors should note that Casey's share count is up YOY in the quarter due to capital-preserving activity ahead of the Fikes acquisition. Buybacks have resumed, reduced the share count in FQ2, and are expected to continue in 2026. 

Reason #3: Casey’s Has Broad Market Support

While the earnings results, momentum, and capital return all provide incentives to buy and own this stock, it is the broad market support that drives its price higher over time.

The support is evident in analyst and institutional activity, which reveals a high ownership rate and a tendency toward accumulation. Analysts who rate the stock as a Moderate Buy have been raising their 2026 price targets, and the trend continues following the FQ2 release.

The first update includes a price target increase from RBC, which sees this stock trading at an above-consensus $591, sufficient for a new all-time high. Institutions own 85% of the stock and bought on balance in every quarter of 2026, running a balance of approximately $2 bought for each $1 sold. 

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The article "3 Reasons Casey’s General Stores Will Continue Trending Higher" first appeared on MarketBeat.