- Post Holdings is set to acquire 8th Avenue Food & Provisions for approximately $880 million.
- The acquisition will eliminate 8th Avenue’s outstanding net debt.
- This move will bring the manufacturing of Post’s Peter Pan peanut butter in-house.
- Post will enter the dry pasta market through the acquisition, acquiring a leading brand, Ronzoni.
- The acquisition allows Post greater participation in the growing granola segment of the ready-to-eat cereal market.
- After the acquisition closes, 8th Avenue is expected to add around $115 million to Post’s Adjusted EBITDA over the next 12 months.
- Post expects cost synergies from the acquisition to reach approximately $15 million annually by the end of fiscal year 2026.
- Post has increased its fiscal year 2025 Adjusted EBITDA guidance to between $1.46 billion and $1.5 billion, pending the completion of the acquisition by July 1, 2025.
- Analyst recommendations for Post include 7 buys, 3 holds, and no sells.
Post Holdings on Smartkarma
Analyst coverage of Post Holdings on Smartkarma, an independent investment research network, is in a positive light. Baptista Research, a prominent provider on Smartkarma, has published insightful reports on Post Holdings‘ financial performance and strategies. In the report “Post Holdings Powers Up Its Sides Game—Can This Move Rescue Refrigerated Retail?”, Baptista Research acknowledges the mix of strengths and challenges highlighted in Post Holdings‘ first quarter fiscal 2025 results. The report sets a cautiously optimistic tone, emphasizing robust financial outcomes driven by effective cost management and a diversified portfolio. Major ERP conversions at PCB Pet and Weetabix were successfully executed, showcasing the company’s adept project management capabilities.
In another report by Baptista Research titled “Post Holdings’ Financial Masterstroke: How Capital Structure Optimization Fuels Growth Potential! – Major Drivers”, Post Holdings‘ fiscal year 2024 performance is highlighted. The report praises significant growth in adjusted EBITDA over the past two years, achieved through a mix of organic expansion and strategic pet-related acquisitions. This growth has translated into substantial free cash flow, amounting to approximately $1 billion over two years. The report also notes that higher pricing has now aligned with previous input cost inflation, indicating a positive financial outlook for Post Holdings in fiscal year 2024.
A look at Post Holdings Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 3 | |
| Resilience | 3 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Post Holdings Inc., a food company known for its wide range of ready-to-eat cereal products, shows a mixed long-term outlook according to Smartkarma’s Smart Scores. While the company receives solid scores in Value, Growth, Resilience, and Momentum, its rating in the Dividend category is lower. This suggests that investors may find Post Holdings attractive based on its growth potential, overall value, resilience in the market, and momentum but may not expect high dividend returns.
Considering the Smart Scores, Post Holdings appears to have a positive trajectory with strengths in various areas like value, growth, resilience, and momentum. Investors looking for a company with potential for growth and market staying power may find Post Holdings appealing as it continues to expand its presence in the food industry with its ready-to-eat cereal offerings.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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