JPMorgan downgraded Casey’s General Stores to Underweight from Neutral with a price target of $337, up from $300. The firm thinks Casey’s Prepared Foods margins will be negatively impacted by rising cheese costs, which will likely not be passed on to the customer fully. With group low exposure to fuel gross profit, the company has not seen the relative uplift as more fuel exposed U.S. peers from fuel margin, the analyst tells investors in a research note. JPMorgan adds that Casey’s also has high exposure to operating expenditure headwinds given its higher per-store opex footprint with the standard store including a kitchen.
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