Analyst Robert Moskow of TD Cowen maintained a Buy rating on Lamb Weston Holdings (LW – Research Report), with a price target of $132.00.
Robert Moskow’s rating is based on a nuanced understanding of Lamb Weston Holdings’ current challenges and future prospects. Despite short-term disruptions related to an enterprise resource planning (ERP) system conversion, Moskow believes these are temporary and will not significantly affect the company’s performance in fiscal year 2025 (FY25). He maintains confidence in Lamb Weston’s strategic advantages, including its ability to implement a pricing power and mix enhancement strategy within the favorable frozen potato market. This strategy is expected to continue driving shareholder value, which supports the Buy rating.
Furthermore, Moskow acknowledges that while the ERP issues persisted into the third quarter (3Q), Lamb Weston is making steady progress in resolving them. The analyst expects volumes to rebound in the fourth quarter (4Q) as the company overcomes the effects of the ERP transition and laps the impact of exiting unprofitable contracts from the previous year. Additionally, Moskow predicts that Lamb Weston’s pricing and mix improvements will sufficiently counterbalance the cost pressures caused by the ERP issues. These factors, combined with the anticipation of margin expansion in FY25, lend further support to the Buy rating despite a conservative adjustment to the fiscal year 2024 (FY24) earnings per share (EPS) estimates.
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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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