Is POST's New $500 Million Buyback a Signal of Confidence for FY26?

Post Holdings, Inc. (POST) has approved a fresh $500 million share repurchase authorization, which becomes effective today. The decision follows the cancellation of the prior buyback program, under which the company had used roughly $275.2 million to repurchase shares before ending it yesterday.

The timing aligns with a year in which Post Holdings generated strong cash inflows despite volume pressures in cereal and pet food. In the fourth quarter of fiscal 2025, the company produced $301 million in operating cash and roughly $150 million in free cash flow. Full-year free cash flow was around $488.1 million, reflecting steady financial performance across the broader business portfolio.

Share repurchases were already a major use of capital in fiscal 2025. Post Holdings repurchased 6.4 million shares for roughly $708.5 million in fiscal 2025 and by Nov. 19, it had repurchased an additional 1 million shares for about $105.5 million.

Operationally, Post Holdings reported significant year-over-year earnings improvement in key segments. In the fiscal fourth quarter, Foodservice adjusted EBITDA rose 50%, driven by higher egg volumes and pricing benefits tied to avian influenza. Refrigerated Retail also posted strong results, with adjusted EBITDA up 44% from the prior year, supported by pricing actions and the comparison against elevated SG&A levels in the previous period.

Against the backdrop of strong cash generation in fiscal 2025 and its active use of repurchases throughout the year, the new $500 million authorization gives Post Holdings added room to manage shareholder returns while heading into fiscal 2026.

Post Holdings’ Zacks Rank & Share Price Performance

Shares of this Zacks Rank #4 (Sell) company have lost 5.2% in the past month compared with the broader Consumer Staples sector’s 0.9% decline. POST has also underperformed the industry and the S&P 500 index’s decline of 5.1% and 0.5%, respectively, during the same period.

POST Stock's Past Month Performance

Is POST a Value Play Stock?

Post Holdings currently trades at a forward 12-month P/E ratio of 12.64, which is down from the industry average of 14.72 and notably below the sector average of 16.4. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.

POST P/E Ratio (Forward 12 Months)

Stocks to Consider

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 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 2.5% and 167.6%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 416.2%, on average.

Lamb Weston Holdings, Inc. (LW) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It sports a Zacks Rank #1 at present. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.

The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 1.3% from the prior-year levels.

The Chefs' Warehouse, Inc. (CHEF) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 14.7%, on average.

The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 8.1% and 29.3%, respectively, from the prior-year levels.

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

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