TreeHouse Foods Gains 14% in a Month: How to Play the Stock?

TreeHouse Foods, Inc. (THS) has delivered an impressive 14.2% gain over the past month, outperforming the industry’s decline of 0.6% and the broader S&P 500’s advance of 3.5%. With TreeHouse Foods’ massive rise in the past month, investors now face a key decision: Should they hold on to the stock or book a profit?

THS Price Performance vs. Industry & S&P 500

Closing at $20.74 yesterday, THS is trading above the 50-day simple moving average of $18.54. This upward trajectory highlights the stock’s strong momentum and price stability, signaling positive investor sentiment.

THS Trades Above 50-Day Moving Average

Growth and Efficiency Propel THS’ Performance

TreeHouse Foods continues to drive operational efficiencies through robust supply-chain initiatives. On the last earnings call, the company reaffirmed its long-term goal of achieving $250 million in gross supply-chain savings by 2027. In the second quarter of 2025 alone, it realized $10.6 million in year-over-year benefits from supply-chain cost savings and improved operational execution.

THS is focusing on improving its supply chain through several key initiatives, including the TreeHouse Management Operating System and enhancements in procurement and distribution. These efforts are designed to improve operational execution, boost margins and strengthen customer relationships.

TreeHouse Foods is strategically expanding its product portfolio through acquisitions. In January 2025, the company acquired Harris Tea, a move aimed at strengthening its position in the fast-growing private-label tea market. This acquisition aligns with TreeHouse’s long-term strategy of broadening its private-label offerings and enhancing operational efficiencies through vertical integration.

Harris Tea's acquisition contributed 4.5% to the second quarter of 2025 net sales, helping lift total net sales to $798 million, up 1.2%, from $788.5 million in the same period last year. The acquisition also immediately boosted gross margins and deepened TreeHouse’s presence in the high-growth private-label hot beverage segment.

THS’ Valuation Picture

Despite this uptick in the stock price, TreeHouse Foods is currently trading at a discount to its historical and industry benchmarks. THS’ forward 12-month price-to-earnings multiple is 10.74X, below its median level of 12.46X in the past year and lower than the industry’s multiple of 15.52X. This implies that, relative to its earnings potential, THS stock might still be undervalued.

THS P/E Ratio (Forward 12 Months)

Challenges That May Pressure TreeHouse Foods Stock

TreeHouse Foods operates in a dynamic environment with challenging consumer trends, slower category growth and operational disruptions. In the second quarter of 2025, volume and mix declined 6.2%, due to margin management actions of 2.6%, service disruptions from the griddle facility restoration of 1.2% and softer consumption trends of 2.4%. Gains from Harris Tea and favorable pricing partially offset these pressures.

Commodity inflation also weighed on margins. Adjusted EBITDA faced a $9.7 million drag from Pricing Net of Commodity Costs (“PNOC”) due to higher input costs in the second quarter. While supply-chain savings mitigated some impact, PNOC could remain a drag in the third quarter, with management expecting improvement to begin in the fourth quarter.

What Should Be Your Move on THS?

TreeHouse Foods’ recent stock rally reflects investor confidence driven by strong operational execution, supply-chain efficiencies and momentum from the Harris Tea acquisition. However, challenges such as softening volume trends, operational disruptions and ongoing commodity inflation could temper near-term performance.

While the stock appears undervalued relative to its earnings potential, cautious investors may prefer to wait for more favorable conditions before entering. Current investors may benefit from holding their positions. TreeHouse Foods presently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Celsius Holdings, Inc. (CELH) develops, processes, manufactures, markets, sells and distributes functional energy drinks. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings indicates growth of 78.1% and 55.7%, respectively, from the prior-year levels. Celsius Holdings delivered a trailing four-quarter earnings surprise of 5.4%, on average.

United Natural Foods, Inc. (UNFI) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1. UNFI delivered a trailing four-quarter earnings surprise of 416.2%, on average.

The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 2.4% and 115.5%, respectively, from the year-ago figures.

Laird Superfood, Inc. (LSF) manufactures and markets plant-based, natural and functional food in the United States. It has a Zacks Rank #2 (Buy) at present. Laird Superfood delivered a trailing four-quarter earnings surprise of 11.3%, on average.

The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and earnings indicates growth of 21% and 23.8%, respectively, from the prior-year levels.

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This article originally published on Zacks Investment Research (zacks.com).

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