Key insights
- Casey's General Stores will join the S&P 500, replacing Hologic. Index inclusion may boost the stock due to increased visibility and fund buying. Casey's has benefited from consumers seeking value, driving sales and earnings beats. Analyst sentiment is largely bullish, though the stock has outpaced price targets. DigitalOcean and Broadstone Net Lease will fill the vacancies in the S&P MidCap 400 and SmallCap 600, respectively.
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Casey's General Stores is set to join the S&P 500 this week, after a torrid rally in recent months.
Casey's (CASY) stock will move from the S&P MidCap 400 to the S&P 500 ahead of the opening bell on Thursday, S&P Dow Jones Indices said Monday. The retailer is replacing Hologic (HOLX), after the medical tech firm agreed to be taken private by Blackstone (BX) and TPG (TPG) in a deal that closed Tuesday.
The move could help Casey's stock, which was little changed Tuesday afternoon on a down day for broader markets, extend its recent rally. The shares have soared 35% since the start of the year, and some 80% in the last 12 months as sales surged and the gas station and convenience store operator consistently beat analyst estimates in recent quarters.
Inclusion in a major index can help boost a stock by introducing it to a wider base of investors, and its shares being bought up by funds that track the performance of the index.
The chain has benefitted from Americans' search for value, as many squeezed consumers have turned to lower-cost options like discount retailers and convenience stores for more of their shopping.
Analysts are largely bullish on Casey's. Of the six analysts with current ratings tracked by Visible Alpha, five have recommended buying the stock compared to one neutral rating, though it's already outpaced their mean price target with its recent gains.
Casey's will be replaced by DigitalOcean Holdings (DOCN) in the S&P MidCap 400, and Broadstone Net Lease (BNL) will take DigitalOcean's spot in the S&P SmallCap 600.
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