CrossAmerica Partners LP (CAPL) stock intrinsic value fair value estimate & owner earnings analysis

CrossAmerica Partners is a Delaware limited partnership that distributes motor fuel (ExxonMobil, BP, Marathon, Shell, Valero and Phillips 66 brands) and owns or leases real estate for gas stations. At the end of 2025 it owned or leased about 1,000 sites, ran 352 of them itself as convenience stores, and supplied fuel to roughly 1,600 sites in 34 states. Its wholesale segment earned $73 million of operating income in 2025 (down from $91 million in 2023) and its retail segment $98 million. The Topper Group controls the general partner and holds 38.5% of the units. We measure earnings as cash from operations, less swings in working capital, less unit-based pay, less maintenance-type capital spending. This is after interest, so no debt is subtracted separately. On that basis the business earned $1.39 per unit in 2025, $1.65 in 2024 and $2.24 in 2023. The 2022 figure of $3.35 reflects an unusually strong fuel-margin year and is excluded from our normal level. We use the median of 2023 to 2025, about $1.65 per unit, as the normal level: the business changed after it began selling and converting sites and paying out lessee-dealer leases, and years before 2023 describe a larger lessee-dealer base. The $44 million gain on site sales in 2025 is non-cash and is not counted. One judgement matters: the company reports only $8.5 million of 2025 capital spending as sustaining, with $27.2 million as discretionary growth spending on company-operated sites. Because revenue fell in 2025, our method treats all $35.7 million as an ongoing cost. That is conservative, and on the company's own split earnings would be higher. The key trend is shrinkage. Sites supplied fell from 1,696 to 1,569 between 2023 and 2025, lessee-dealer sites from 569 to 333, and rent from lessee dealers from $69.7 million to $47.1 million. Management calls this a real estate rationalization; the $104 million raised from site sales in 2025 paid down $75 million of debt (total debt is now about $697 million). Distributions of $2.10 per unit (about $80 million a year) exceed our estimate of owner earnings, so they look funded partly by asset sales. Growth reconciliation: owner earnings per unit fell about 16% in 2025, and we assume the first forecast year is about $1.70, above that trend. Two dated facts support the rebound: first-half 2026 operating cash flow was $61.1 million against $37.7 million a year earlier, with working capital nearly neutral and capital spending lower at $10.9 million against $22.0 million; and a January 31, 2026 amendment of the Getty master lease (106 sites) reset rent to $6.9 million a year with 1.5% annual escalation, removed fuel-volume-based rent, and extended the term to April 2037. We could not trace the reason for the first-half 2026 jump in the filings available to us, so we credit only a modest return to the normal level and no growth beyond it. Base case: about $1.70 per unit in the first year, then declining about 3% a year indefinitely as sites continue to shrink, worth about $19 per unit. We credit no growth in company-operated store sales or new sites, since none is contracted. Real estate ownership (about 56% of sites are owned) and supply contracts with dealers are what persist. Bear case: about $9.50 per unit. The credit facility of $692 million matures March 31, 2028 and carries an effective 5.6% rate. We assume it is refinanced at about two percentage points higher, costing roughly $0.30 per unit a year, while site and rent shrinkage accelerates to about 6% a year from a $1.30 starting point. Bull case: about $31 per unit. The first-half 2026 improvement holds, earnings run near $2.20 per unit (between 2021 and 2023 levels), and shrinkage slows to about 1% a year as debt paydown lowers interest. What would make this wrong: a sharper loss of dealer volume, a refinancing on worse terms, or a distribution cut. A further point: $25 million of related-party preferred interests begin paying cash distributions in the fourth quarter of 2026, a small but senior claim. The most recent quarterly filing is the second quarter of 2026, and the annual filing is for 2025.