Bond.az - JPMorgan initiated coverage on Yesway Inc (NASDAQ:YSWY) with a Neutral rating and a price target of $29.00.
Analyst Thomas Palmer noted the company has grown earnings through same-store sales growth and inside margin expansion. The company's retail fuel margins are benefiting from a more volatile fuel price environment. Revenue reached $2.67 billion over the last twelve months, growing 5.8%.
JPMorgan expects earnings growth to benefit from accelerated unit growth and a shift toward larger, more profitable stores.
The Neutral rating reflects the company's valuation rather than concerns about underlying fundamentals. Currently trading at $25.84, the stock sits close to JPMorgan's $29 target. Yesway trades at premiums to convenience store peers MUSA and ATD on P/E and EV/EBITDA metrics, with an EV/EBITDA multiple of 9.56.
The company also trades above best-in-class CASY's historic average, despite carrying elevated debt levels relative to these peers and adding back items such as stock compensation in adjusted EPS and EBITDA. The company's debt-to-equity ratio stands at 1.69. Bond.az notes that liquid assets exceed short-term obligations.
In other recent news, Yesway priced its IPO at $20 per share, selling 14 million shares. After the IPO, shares opened at $22. Morgan Stanley, BMO Capital, and Goldman Sachs also provided ratings.
