Post Holdings Up 13% in 3 Months: Should You Cash in or Stay Invested?

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Post Holdings, Inc.’s POST shares have soared 12.7% in the past three months, outperforming the industry and the S&P 500’s growth of 9.1% and 2.6%, respectively. After yesterday’s closing at $115.15, the stock is currently hovering close to its 52-week high of $118.96, touched on Sept. 5.

Given POST's strong performance on the bourses, investors are at a fix on whether they should cash in or stay invested.

Factors Supporting POST’s Growth

Post Holdings is being driven by strategic initiatives and a strong performance in its Post Consumer Brands (“PCB”) segment. The company has been benefiting from carryover pricing and operational efficiencies, particularly in the pet food and grocery divisions, supported by strong manufacturing capabilities. Strategic acquisitions have also played a key role in Post Holdings' growth.

The company’s net sales for the third quarter of fiscal 2024 were $1,947.7 million, marking an increase of 4.7% year over year. Net sales include $436.4 million from the acquisitions recently completed in the PCB and Weetabix segments.

The PCB segment delivered a solid third-quarter performance. In the quarter, net sales of PCB were $1,008.1 million, which increased 15.7% year over year. The figure includes $428.9 million from the acquisition of the pet food business from The J. M. Smucker Company (concluded in April 2023) and Perfection Pet Food, LLC (December 2023). This marked the third consecutive quarter of growth for the PCB segment.

Moving to Weetabix, net sales were $136.1 million in the third quarter, increasing 1.4% year over year. The figure includes $7.5 million attributable to the buyout of Deeside Cereals (December 2023). 

On its third-quarter earnings call, POST raised its fiscal 2024 adjusted EBITDA guidance for the third straight quarter, taking it to $1,370-$1,390 million from $1,335-$1,375 million estimated earlier. Management’s raised guidance indicates its confidence in the company’s future potential.

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Zacks Investment Research


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POST’s Shareholder-Friendly Moves

Post Holdings’ healthy cash flows allow it to undertake shareholder-friendly actions. Cash provided by operating activities was $272 million for the three months ended June 30, 2024. The company repurchased two million shares for $207.9 million in the third quarter of fiscal 2024. On July 30, the board authorized a new $500 million share repurchase program. These actions reflect the company’s confidence in future prospects as well as focus on rewarding its shareholders.

How are POST’s Estimates Trending?

Reflecting the positive sentiment around POST, the Zacks Consensus Estimate for earnings per share has seen upward revisions. In the past 60 days, analysts have increased their estimates for earnings per share by 6.1% to $5.95 for the current year and 1.4% to $6.30 for the next fiscal year. These estimates indicate year-over-year growth of 11.4% and 5.9%, respectively.