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Post Holdings (POST) Up More Than 20% in 3 Months: Here's Why
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Post Holdings, Inc. (POST - Free Report) appears well-positioned, courtesy of robust pricing actions and strength in the Post Consumer Brands. The consumer packaged goods company is benefiting from portfolio strength stemming from prudent acquisitions.
The Zacks Rank #1 (Strong Buy) stock has increased 22.7% in the past three months compared with the industry’s 4.3% growth. The stock has comfortably outperformed the Zacks Consumer Staples sector’s 4% growth in the same period.
Post Holdings has been benefiting from strategic pricing actions undertaken to counter inflationary headwinds. The trend continued in the first quarter of fiscal 2024, with the top and the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. Higher average net selling prices drove the company’s performance in the Post Consumer Brands and Weetabix segments.
During the quarter, Post Consumer Brands generated net sales of $988.6 million, which rose 78.2%, primarily owing to $426.6 million in sales from acquisitions. The company’s pet food and grocery business delivered impressive results in the segment. The Pet food business performed better than expected on the back of solid manufacturing performance. The Grocery business gained from carryover pricing. Segment profit showed significant growth, up 67.3% to $132.7 million, with adjusted EBITDA rising 68.1% to $189.8 million. This reflects strong operational performance and acquisition synergies.
Acquisitions Boost Portfolio
Post Holdings is benefiting from its focus on acquisitions, which has been helping it expand its customer base. In December 2023, Post Holdings acquired Perfection Pet, which is part of its Post Consumer Brands segment. On Apr 28, 2023, Post Holdings acquired a select pet food brand from The J.M. Smucker Co. Such an acquisition provides the company with a compelling entry point into the attractive and growing pet food category. In December 2023, the company also acquired Deeside Cereals to form a part of its Weetabix segment. In the first quarter of fiscal 2024, the company’s net sales included $428.9 million from acquisitions.
We believe that such well-chalked expansion endeavors coupled with other growth efforts are likely to keep narrating POST’s growth story.
Other Promising Stocks
Mondelez International (MDLZ - Free Report) has a trailing four-quarter earnings surprise of 8.6%, on average. MDLZ currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Mondelez’s current financial-year sales and earnings indicates growth of 2.9% and 10%, respectively, from the year-ago period's reported figures.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 145%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales indicates growth of 29% from the year-ago reported actuals.
Lamb Weston Holdings, Inc. (LW - Free Report) is a leading global manufacturer, marketer and distributor of value-added frozen potato products. LW currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggest growth of 28.3% and 26.9%, respectively, from the year-ago reported numbers. LW has a trailing four-quarter average earnings surprise of 28.8%.
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Post Holdings (POST) Up More Than 20% in 3 Months: Here's Why
Post Holdings, Inc. (POST - Free Report) appears well-positioned, courtesy of robust pricing actions and strength in the Post Consumer Brands. The consumer packaged goods company is benefiting from portfolio strength stemming from prudent acquisitions.
The Zacks Rank #1 (Strong Buy) stock has increased 22.7% in the past three months compared with the industry’s 4.3% growth. The stock has comfortably outperformed the Zacks Consumer Staples sector’s 4% growth in the same period.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s delve deeper.
Image Source: Zacks Investment Research
Pricing & Brand Strength Drive Growth
Post Holdings has been benefiting from strategic pricing actions undertaken to counter inflationary headwinds. The trend continued in the first quarter of fiscal 2024, with the top and the bottom line increasing year over year and surpassing the Zacks Consensus Estimate. Higher average net selling prices drove the company’s performance in the Post Consumer Brands and Weetabix segments.
During the quarter, Post Consumer Brands generated net sales of $988.6 million, which rose 78.2%, primarily owing to $426.6 million in sales from acquisitions. The company’s pet food and grocery business delivered impressive results in the segment. The Pet food business performed better than expected on the back of solid manufacturing performance. The Grocery business gained from carryover pricing. Segment profit showed significant growth, up 67.3% to $132.7 million, with adjusted EBITDA rising 68.1% to $189.8 million. This reflects strong operational performance and acquisition synergies.
Acquisitions Boost Portfolio
Post Holdings is benefiting from its focus on acquisitions, which has been helping it expand its customer base. In December 2023, Post Holdings acquired Perfection Pet, which is part of its Post Consumer Brands segment. On Apr 28, 2023, Post Holdings acquired a select pet food brand from The J.M. Smucker Co. Such an acquisition provides the company with a compelling entry point into the attractive and growing pet food category. In December 2023, the company also acquired Deeside Cereals to form a part of its Weetabix segment. In the first quarter of fiscal 2024, the company’s net sales included $428.9 million from acquisitions.
We believe that such well-chalked expansion endeavors coupled with other growth efforts are likely to keep narrating POST’s growth story.
Other Promising Stocks
Mondelez International (MDLZ - Free Report) has a trailing four-quarter earnings surprise of 8.6%, on average. MDLZ currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Mondelez’s current financial-year sales and earnings indicates growth of 2.9% and 10%, respectively, from the year-ago period's reported figures.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 145%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales indicates growth of 29% from the year-ago reported actuals.
Lamb Weston Holdings, Inc. (LW - Free Report) is a leading global manufacturer, marketer and distributor of value-added frozen potato products. LW currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggest growth of 28.3% and 26.9%, respectively, from the year-ago reported numbers. LW has a trailing four-quarter average earnings surprise of 28.8%.