In a report released today, Marc Torrente from Wells Fargo maintained a Hold rating on Post Holdings (POST – Research Report), with a price target of $108.00.
Marc Torrente has given his Hold rating due to a combination of factors related to the performance and strategic positioning of Post Holdings. The company has shown positive momentum, with a 7.7% rise in share price following a strong first fiscal quarter which outperformed the S&P 500. Torrente acknowledges the potential for continued upside in FY24, supported by a diversified strategy that has allowed certain business segments like Pet and Foodservice to balance out pressures in other areas such as retail. Despite the near-term investments which may dampen FY24 results, these are expected to contribute to better operating leverage in FY25 and beyond, although they carry some execution risk.
Moreover, Torrente’s assessment factors in the financial cadence for FY24, expecting a modest increase in EBITDA for the remaining quarters, albeit at a lower rate compared to FQ1. This is attributed to increased investments in the Pet segment, volatility in Foodservice, and seasonal trends in other segments. The report suggests a cautious optimism with a revised EBITDA estimate that reflects better than anticipated run-rate flow-through, especially in the Pet segment and ready-to-drink shake production. The new price target of $108, up from $95, is based on these considerations, including a valuation multiple that aligns with historical averages, signifying a balanced view of the company’s growth prospects and existing risks.
Torrente covers the Consumer Defensive sector, focusing on stocks such as Lamb Weston Holdings, Post Holdings, and Freshpet. According to TipRanks, Torrente has an average return of -3.6% and a 55.56% success rate on recommended stocks.
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Post Holdings (POST) Company Description:
Post Holdings, Inc. is a consumer packaged goods holding company, which engages in operating of centre-of-the-store, refrigerated, foodservice, food ingredient, active nutrition, and private brand food categories. It operates through the following segments: Post Consumer Brands, Weetabix, Refrigerated Food, Active Nutrition, and Foodservice. The Post Consumer Brands segment manufactures, markets, and sells branded and private label RTE cereal and hot cereal products. The Weetabix segment focuses in the marketing and distribution of branded and private label RTE cereal products. The Refrigerated Food segment produces and/or distributes egg products, sausage, side dishes, cheese, and other refrigerated products to retail and foodservice customers. The Active Nutrition segment markets and distributes ready-to-drink beverages, bars, powders, and other nutritional supplements. The Foodservice segment includes egg and potato products. The company was founded by Charles William Post in 1895 and is headquartered in St. Louis, MO.
Read More on POST:
- Post Holdings Announces $400 Million Share Buyback Plan
- Post Holdings Announces CEO Robert Vitale’s Return
- Post Holdings Reports Results for the First Quarter of Fiscal Year 2024; Raises Fiscal Year 2024 Outlook
- Post raises FY24 adjusted EBITDA view to $1.29B-$1.34B from $1.22B-$1.28B
- Post Holdings reports Q1 adjusted EPS $1.69, consensus $1.10
