BMO Capital Raises Price Target on Post Holdings (POST) Following 3Q
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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."
Shares of Post Holdings closed at $84.27 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesBMO Capital, Earnings, Definitive Agreement
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