Peter Galbo, an analyst from Bank of America Securities, maintained the Buy rating on Lamb Weston Holdings (LW – Research Report). The associated price target is $130.00.
Peter Galbo has given his Buy rating due to a combination of factors that signal a solid performance and promising outlook for Lamb Weston Holdings. In the second quarter of fiscal year 2024, the company’s adjusted earnings per share (EPS) surpassed Bank of America’s estimate and consensus, even with a one-time inventory charge accounted for. Excluding this charge, the company’s adjusted EPS and EBITDA would have considerably exceeded expectations. The company also demonstrated better-than-anticipated organic volume declines, especially in North America, and a stronger price/mix improvement year-over-year, which suggests robust pricing power.
Additionally, Lamb Weston Holdings updated its fiscal year 2024 outlook with higher adjusted EPS projections, while maintaining its EBITDA forecast inclusive of the one-time charge. This signals management’s confidence in the company’s ability to navigate through challenges while still delivering growth. Lamb Weston’s strategic decisions, including lower administrative expenses and announced capacity expansions, underscore its potential for margin improvement and demand growth. Galbo’s price objective of $130 reflects a premium valuation compared to the packaged food index, justified by Lamb Weston’s potential to return to pre-COVID performance levels and capitalize on favorable demand trends and margin expansion.
LW’s price has also changed slightly for the past six months – from $115.120 to $105.260, which is a -8.56% drop .
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Lamb Weston Holdings (LW) Company Description:
Lamb Weston Holdings, Inc. engages in the production, distribution, and marketing of value-added frozen potato products. It operates through the following business segments: Global, Foodservice, Retail, and Other. The Global segment includes branded and private label frozen potato products sold in North America and international markets. The Foodservice segment comprises branded and private label frozen potato products sold throughout the United States and Canada. The Retail segment consists consumer facing retail branded and private label frozen potato products sold primarily to grocery, mass merchants, club, and specialty retailers. The Other segment compose of vegetable and dairy businesses. The company was founded on July 5, 2016 and is headquartered in Eagle, ID.
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