ST. LOUIS - Post Holdings , Inc. (NYSE: NYSE:POST), a significant player in the consumer packaged goods sector with a market capitalization of $6.87 billion and strong financial health rating according to InvestingPro, announced today that a contracted third-party egg-laying facility in Iowa, associated with its subsidiary Michael Foods, has tested positive for avian influenza. The affected site contains roughly 4.5 million hens, representing about 12% of Post's total controlled egg supply, which includes both owned and contracted farms.
Despite this setback, Post Holdings has confirmed its fiscal year 2025 Adjusted EBITDA forecast, which ranges from $1,410 million to $1,460 million, building upon its last twelve months' EBITDA of $1.28 billion. The company believes that the financial repercussions of the avian influenza incident are within the anticipated range of their profit guidance. According to InvestingPro data, the company maintains a healthy current ratio of 2.36, indicating strong ability to meet short-term obligations. However, the provided outlook does not account for a significant spread of the virus within Post's network, acknowledging that such an event could lead to uncertain financial impacts.
Post Holdings has stated that it will not issue further updates on individual avian influenza incidents unless they cumulatively affect an additional 5% of the company’s controlled supply. The tracking and reporting of avian influenza cases are managed by the APHIS division of the USDA and individual states.
The company uses Adjusted EBITDA, a non-GAAP financial measure, to assess performance and make strategic decisions. This measure is not prepared in accordance with U.S. GAAP, as it excludes certain items, and may not be comparable to similarly titled measures used by other companies. Post's management believes that this non-GAAP measure provides a clearer understanding of the company's operational performance and underlying trends.
Post Holdings has cautioned that prospective financial information is speculative and subject to change. The forward-looking statements, including the Adjusted EBITDA outlook, are based on current knowledge and are inherently uncertain. The company acknowledges that actual results may differ significantly from these projections.
This announcement is based on a press release statement and contains forward-looking statements subject to risks and uncertainties, including those related to the avian influenza outbreak and its potential impact on Post Holdings' financial outcomes. Despite market uncertainties, the company has demonstrated strong performance with a 35.56% return over the past year, and InvestingPro analysis suggests the stock is currently trading below its Fair Value. Investors can access detailed analysis and 8 additional ProTips about POST through InvestingPro's comprehensive research reports.
In other recent news, Post Holdings reported a solid performance in its fourth-quarter earnings for the fiscal year 2024, with a 45% increase in adjusted EBITDA over the last two years. The company generated approximately $1 billion in free cash flow, despite a minor 2% decline in consumption volumes. Recent developments also include the completion of the redemption of the remaining 5.625% senior notes due in 2028, with an aggregate principal amount of $464.9 million.
Evercore ISI analyst upgraded the price target for Post Holdings to $126.00, maintaining an Outperform rating on the stock. The analyst noted a 3% year-over-year growth in the FY25 EBITDA estimate, which now stands at $1.447 billion. Post Holdings is expected to benefit from the execution of the Nutrish brand relaunch and the enterprise resource planning implementation at Weetabix.
Post Holdings is also well-positioned for strategic capital allocation, including share repurchases and mergers and acquisitions. With debt leverage projected to decrease and an anticipated $500 million in free cash flow generation in FY25, the company is seen as a value pick in the Food sector. Finally, the company projects adjusted EBITDA for FY 2025 to be between $1.41 billion and $1.46 billion, with capital expenditures ranging from $380 million to $420 million.
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