Post Holdings Receives Strong Buy Rating and Increased Price Target

Stifel Nicolaus's Matthew Smith raised their price target on Post Holdings (NYSE: POST) by 4.3% from $115 to $120 on 2024/05/06. The analyst maintained their Strong Buy rating on the stock.

Smith's updated price target reflects their confidence in Post Holdings' future performance. The decision to increase the target was based on the company's strong second-quarter results and improved guidance provided by management.

Post Holdings reported earnings per share (EPS) of $1.51 for Q2 2024, surpassing the Zacks Consensus Estimate of $1.29. This represents a 37.3% increase compared to the same quarter last year. Revenue for the quarter came in at $1.999 billion, beating the Q2 2023 figure by 23.4%. However, it fell slightly short of the Zacks Consensus Estimate of $2.028 billion.

The company's EBITDA for the quarter stood at $345.2 million, reflecting a 24.9% year-over-year increase. These positive financial results contributed to Stifel Nicolaus's decision to raise their EBITDA forecast for the full year to $1.37 billion, an increase of $40 million from their previous estimate. The improved forecast is primarily attributed to the greater contribution from the company's Pet segment.

Post Holdings' management also provided updated guidance for FY 2024. They now expect EBITDA to range from $1.335 billion to $1.375 billion, up from the previous guidance of $1.29 billion to $1.34 billion. The company anticipates capital expenditures of $420 million to $445 million for the year.

During the earnings call, President & CEO Robert Vitale expressed satisfaction with the company's performance in the first half of FY 2024. He highlighted strong manufacturing performance, disciplined pricing, and solid cost management as key drivers of their results. Vitale also acknowledged that declining volumes, particularly due to SNAP reductions, have impacted the business but expects this to primarily affect consumption, location, and price points rather than overall volume.

The positive outlook for Post Holdings is also supported by Evercore ISI Group's David Palmer. On the same day as Smith's update, Palmer raised the price target on POST by 3.4%, from $118 to $122, while maintaining a Buy rating on the stock.

Analyst sentiment towards Post Holdings remains overwhelmingly positive. Currently, 100% of top-rated analysts rate the stock as a Strong Buy or Buy. No analysts recommend holding the stock or selling it. The consensus forecast among analysts is that Post Holdings will deliver earnings per share of $4.96 in the upcoming year, representing an 11.9% decrease from the previous year.

Since the release of Post Holdings' Q2 2024 report on May 2, the stock price has increased by 0.5%. Year-over-year, the stock has seen a solid 17.3% growth. However, it is important to note that during this period, Post Holdings has slightly trailed the performance of the S&P 500, which has surged 25.2%.

Matthew Smith, the Stifel Nicolaus analyst who updated the price target, holds a strong track record in the financial industry. Ranked in the top 20% out of 4,575 Wall Street analysts by WallStreetZen, Smith has an average return of 9.3% and a win rate of 52.3%. Their area of expertise lies in the Energy and Consumer Defensive sectors.

Post Holdings, Inc. operates in various categories including center-of-the-store, refrigerated, food service, food ingredient, and convenient nutrition. Established in 1895, Post Holdings is headquartered in Saint Louis, MO.

Want to get in touch? Email us at news@wallstreetzen.com.

WallStreetZen and Don Francis do not hold any positions in the companies mentioned in this article. The information and statistics provided herein are presented for general informational purposes only and may not be accurate, complete, or up-to-date. It should not be interpreted as a recommendation to buy or sell any stocks and should not be solely relied upon for making investment decisions. It does not take into account your financial situation or risk profile. All investors should conduct their own investment due diligence before buying a stock. WallStreetZen expressly disclaims any liability for the accuracy, reliability, or completeness of the analysts' information, price targets, ratings, or opinions.