NEW YORK (TheStreet) -- Post Holdings (POST) - Get Report stock closed higher by 1.41% to $76.76 on Thursday, after the food company was initiated with an "overweight" rating and a $90 price target at KeyBanc Capital Markets.
Analysts see a 20% upside to the stock because of improving free cash flow, potentially higher synergies related to the MOM Brands acquisition, rising margins in the active nutrition segment and strong long-term earnings potential from its Michael Foods unit.
"POST has established a clear pattern of under-promising and over-delivering on prior synergy targets; we believe MOM Brands is ripe with synergy upside and see $100M+ given the identical nature of the MOM and POST legacy cereal businesses, driving solid mid-20%+ segment margins," KeyBanc analysts explained in a note released before today's market open.
Post has made 11 deals in three years and integration efforts are starting to pay off with a significant drop in general and administrative costs.
"We believe these dynamics combined with several segment-specific catalysts should conservatively clear a path to just under $1B in organic EBITDA over the next three years (ex-M&A)," analysts added.
Separately, Post has a "buy" rating and a letter grade of B- at TheStreet Ratings because of the company's robust revenue growth, solid stock price performance, good cash flow from operations, expanding profit margins and notable return on equity.
You can view the full analysis from the report here: POST
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.