Casey's General Stores' (CASY) stronger fiscal 2026 earnings outlook and sustained fuel margin strength to support a modest bump to forecasts and a higher target price, RBC Capital Markets said in a note Tuesday.

The company is expected to see about 13% compound annual growth in earnings before interest, taxes, depreciation, and amortization and earnings per share between fiscal 2024 and fiscal 2027, the investment firm said.

RBC said its positive stance rests on Casey's footprint in lower-cost areas and smaller communities, along with a merchandise mix and store growth strategy that the firm believes support above-average returns.

In-store profitability remains a key pillar, with fiscal Q2 inside gross margin at 42.4%, about 20 basis points higher year over year, the firm said.

The Fikes acquisition, completed Nov. 1, 2024, is now adding to consolidated results and remains central to its view on integration progress and future efficiency gains, according to the note.

The note added that RBC expects Casey's Dec. 10 earnings call to focus on same-store trends into fiscal Q3, the contribution and integration path of Fikes, the durability of elevated fuel margins, and spending patterns in grocery and prepared foods.

RBC maintained a sector perform rating for Casey's and raised its price target to $591 from $570.

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