BMO Capital Raises Price Target on Post Holdings (POST) Following 3Q

August 8, 2016 8:49 AM EDT
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Price: $84.00 --0%

Rating Summary:
    9 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 10 | New: 7
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BMO Capital reiterated an Outperform rating on Post Holdings (NYSE: POST), and raised the price target to $90.00, following the company's 3Q earnings report. POST reported EBITDA of $231 million, exceeding consensus estimates. Management raised its 2016 EBITDA outlook to $915-925 million (from $893-913 million).

Analyst Kenneth Zaslow commented, "Notwithstanding the margin compression to more normalized levels in Michael's egg business, Post's multi-faceted strategy across its diverse portfolio should create sustainable growth of at least low- to mid-single-digit on F2016 base EBITDA, with the increasing probability of an acquisition. We continue to expect Post to generate at least $950 million of EBITDA in F2017 despite the normalization of egg margins as: 1) Michael's egg margins likely will normalize above pre-AI levels; 2) the underlying health of the cereal category should continue to benefit from favorable dynamics, including ongoing focus on base sales, increased category support, and benign input costs; 3) POST likely will exceed its synergy targets following the completion of its ERP integration of both legacy Post and MOM; and 4) POST should generate solid sales growth across its three Active Nutrition businesses next year, while it should benefit from a lower cost structure in Dymatize and PowerBar with incremental operating leverage in Premier."

For an analyst ratings summary and ratings history on Post Holdings click here. For more ratings news on Post Holdings click here.

Shares of Post Holdings closed at $84.27 yesterday.

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