S&P Capital Initiates Coverage on CST Brands, Sees Long Term EPS Benefits

In a report published Tuesday, S&P Capital analyst Joseph Agnese initiated coverage on CST Brands, Inc. (NYSE: CST) with a $37.00 price target.

According to the report, long term EPS benefits from an acceleration in square footage growth, industry consolidation, and an improved product mix are some of the things to come following the improved retail gasoline profitability.

“We are initiating analytical coverage of CST Brands, an operator of 1,800 gas stations and convenience stores in the southwestern U.S. and eastern Canada, that was spun off of Valero (VLO 49, Strong Buy) in May 2013,” the report said. “We have a 12-month target price of $37, assuming a peer-based EV/EBITDA ratio of 8.1X and our 2014 EBITDA estimate of $406 million.”

CST closed Monday at $36.68.