Casey's General Stores: Upgraded 2026 Earnings Forecast and Valuation Implications for Long-Term Shareholders

Casey's General Stores (CASY) has delivered a compelling earnings performance in Q1 2026, with results that have reshaped investor expectations for the year. The company reported earnings per share (EPS) of $5.77, surpassing analysts' consensus estimate of $5.02 by $0.75, while revenue surged 11.5% year-over-year to $4.57 billion, outpacing the projected $4.47 billion, according to MarketBeat's earnings page. This outperformance has triggered a revision of fiscal 2026 earnings forecasts, with analysts now projecting 9.3% growth for the year, according to a Yahoo Finance report. For long-term shareholders, the question becomes: Does this upgraded outlook justify the stock's current valuation, and what does it mean for future returns?

Drivers of Earnings Momentum

The Q1 results were fueled by a combination of strategic and operational strengths. Inside store sales grew 14.2% year-over-year, driven by strong demand for prepared foods and non-alcoholic beverages, which accounted for 28% of total inside sales, according to Intellectia. Fuel sales also contributed meaningfully, with a 18.0% increase in gallons sold, supported by a broader store base and improved same-store performance, per the quarter-results report. Meanwhile, the company's disciplined capital allocation-$31 million in share repurchases and a $0.57 quarterly dividend-signals confidence in its cash flow generation, according to Intellectia.

Perhaps most notably, Casey's reaffirmed its guidance to open at least 80 new stores in fiscal 2026, a key catalyst for long-term growth. Analysts at Intellectia note that this expansion, combined with digital strategy initiatives, underpins the upgraded earnings forecasts, as outlined in a Yahoo Finance piece. With 1,800 stores already in operation, the company's ability to scale its footprint while maintaining margins (e.g., a stable fuel margin of $0.41 per gallon) suggests a durable business model, according to Parameter's analysis.

Valuation Metrics: Premium or Justified?

Despite the strong earnings, Casey's General Stores trades at a premium to its peers. As of October 17, 2025, the stock carries a trailing P/E ratio of 36.39 and a forward P/E of 33.95, based on StockAnalysis statistics, significantly higher than the convenience store industry average of 20.5. The PEG ratio of 2.59 further underscores this premium, indicating that the stock is trading at more than twice its expected earnings growth, according to a Yahoo Finance article.

However, the company's price-to-book ratio of 5.79-up from 5.31 in Q3 2025-reflects investor confidence in its asset base and growth potential, per the MacroTrends price-to-book data. Analysts at Simply Wall St. argue that the stock's fair value may be higher than current levels, estimating an intrinsic value of $564.33, compared to the consensus price target of $540.09, according to Simply Wall St.. This suggests that while the valuation appears stretched, the market is pricing in continued outperformance.

Long-Term Shareholder Value: Risks and Opportunities

The upgraded 2026 forecast implies a 13.20% EPS growth rate for the next year and a 10.68% compound annual growth rate over five years, according to MarketScreener valuation data. For long-term investors, the critical question is whether these projections are sustainable. Casey's has demonstrated resilience in its core markets, but risks include macroeconomic headwinds (e.g., inflationary pressures on fuel margins) and competition from digital-first retailers.

That said, the company's balance sheet provides a buffer. With $1.4 billion in available liquidity, including $458 million in cash and equivalents, Intellectia notes that Casey's has the flexibility to navigate volatility while funding expansion. The recent share repurchases also signal management's belief in the stock's intrinsic value, a positive signal for patient investors.

Conclusion: A High-Priced Bet on Growth

Casey's General Stores' upgraded 2026 earnings forecast reflects a business that is executing well on both the top and bottom lines. However, the stock's valuation metrics-particularly the PEG ratio-suggest that investors are paying a premium for this growth. For long-term shareholders, the key will be whether the company can maintain its current trajectory while expanding margins and returns on capital. If Casey's can continue to open new stores profitably and leverage its digital initiatives, the current valuation may prove justified. But if growth slows or margins compress, the premium could contract.

In the end, the stock remains a high-conviction play for those who believe in the power of its expansion strategy and operational discipline.