Post Holdings: A Resilient Play in a Challenging Sector with 2026 Growth on the Horizon

In a sector marked by margin pressures and shifting consumer preferences, Post Holdings (POST) has emerged as a standout performer. The company's Q3 2025 results—$2 billion in revenue, $2.03 in EPS (surpassing estimates by 22.29%), and a 3.49% post-earnings stock rally—highlight its ability to navigate macroeconomic headwinds. But what truly sets POST apart is its undervalued stock, robust EBITDA growth, and a strategic acquisition that positions it for 2026 expansion.

Undervaluation: A Contrarian Edge in a High-P/E Sector

The U.S. food and beverage sector trades at a lofty 27.8x P/E as of Q3 2025, a 41% premium to its 3-year average of 19.6x. Yet POST trades at a 17.36x P/E and 15.54x P/EBITDA, metrics that appear disconnected from the sector's optimism. This disconnect is not a flaw but a feature.

POST's P/E ratio has plummeted from a 9-year average of 323.31 to 17.27 as of August 2025—a 95% drop. While this reflects past volatility, it also signals a compelling entry point. The company's trailing twelve-month EBITDA of $1.3 billion and updated 2025 guidance of $1.5–$1.52 billion suggest earnings power that outpaces its valuation. At 15.54x P/EBITDA, POST trades below the sector's 2025 average of 27.8x, offering a margin of safety for investors.

EBITDA Growth and Capital Efficiency: The Engine Behind Resilience

POST's adjusted EBITDA has surged to $1.3 billion TTM, driven by cost optimization and disciplined margin management. The company's net leverage ratio has improved to 4.3x, and its current ratio of 2.13 underscores liquidity strength. These metrics are critical in a sector where cash flow volatility is the norm.

The Eighth Avenue acquisition, finalized in July 2025, is a masterstroke. Priced at $880 million, the deal adds Ronzoni pasta, Peter Pan peanut butter, and private-label nut butters to POST's portfolio. Crucially, it's expected to contribute $115 million in EBITDA in 2026, with $15 million in annual cost synergies by FY 2026. This acquisition not only diversifies POST's revenue streams but also aligns with the growing demand for pantry staples and premium nut products.

Share Buybacks: A Signal of Confidence

POST has repurchased 8% of its shares in FY 2025, a move that signals management's belief in the stock's intrinsic value. With a market cap of $6.01 billion, these buybacks amplify returns for shareholders while reducing dilution. At current valuations, the company's buyback program is a value-creation tool, especially as it funds the acquisition through a mix of cash and debt.

2026 Growth Catalysts: Why Now Is the Time to Act

The integration of Eighth Avenue will unlock new revenue streams in 2026. Ronzoni's entry into the dry pasta category—a $12 billion market—positions POST to capitalize on the shift toward home cooking. Meanwhile, Peter Pan's internalization reduces supply chain risks and margin erosion.

Moreover, POST's updated 2025 EBITDA guidance of $1.46–$1.5 billion reflects confidence in its operational playbook. The company's focus on free cash flow generation—$300 million in FY 2024—ensures it can fund growth without overleveraging.

Risks and the Road Ahead

No investment is without risk. The food sector faces input cost volatility, and POST's cereal and pet segments remain challenged. However, the company's diversified portfolio and cost discipline mitigate these risks. The Eighth Avenue acquisition, with its high-margin product lines, further insulates POST from sector-wide downturns.

Investment Thesis: A Buy for 2026

POST's undervaluation, EBITDA growth, and strategic acquisitions create a compelling case for investment. At 15.54x P/EBITDA, the stock trades at a discount to peers like Campbell's (9.811B market cap) and Marzetti (4.907B). With 2026 on the horizon, the integration of Eighth Avenue and the realization of $15 million in synergies will likely drive a re-rating.

For investors seeking a resilient, capital-efficient business with clear growth catalysts, POST offers a rare combination of value and momentum. The market's current skepticism may soon be replaced by optimism—and the best time to act is now.