Lamb Weston Holdings (LW) AI Stock Analysis

• Market Cap: $5.76B
• Dividend Yield: 3.37%
• Average Volume (3M): 2.30M
• Price to Earnings (P/E): 31.7
• Beta (1Y): 0.46
• Revenue Growth: 2.35%
• EPS Growth: 9.61%
• Country: US
• Employees: 10,700
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.69
• Shares Outstanding: 138,879,880
• 10 Day Avg. Volume: 3,159,893
• 30 Day Avg. Volume: 2,301,424
• PEG Ratio: -0.40
• Price to Book (P/B): 4.14
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 31.25
• Enterprise Value/Market Cap: 1.67
• Enterprise Value/Revenue: 1.49
• Enterprise Value/Gross Profit: 6.73
• Enterprise Value/Ebitda: 8.62
• 1Y Price Target: $51.43
• Price Target Upside: 24.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.7
• Revenue Forecast (FY): $6.53B

• Rating: 65 Neutral
• Price Target: $45.00 ▲(8.54% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by mixed financials: strong revenue growth and improved free cash flow are offset by sharp margin compression and elevated leverage. Technicals add modest support with improving near-term momentum despite weaker long-term trend. Valuation is relatively supportive (P/E ~17.3 and ~3.05% yield), while the earnings call and recent events are net-neutral to slightly negative due to price/mix and international headwinds plus restructuring charges.

Positive Factors

Strong Revenue and FCF Rebound

Sustained top-line growth alongside a material free cash flow rebound improves the company's ability to fund operations, capex and shareholder returns while paying down liabilities. Durable cash generation supports strategic flexibility across the next 2–6 months.

Volume Growth and Share Gains

Consistent volume growth and documented customer wins indicate durable demand and strengthened commercial positioning, especially in North America and Asia. Higher utilization and contract stability support long-term revenue resilience and bargaining power with large foodservice customers.

Cost Savings & Cash Conversion Improvements

A visible cost-savings program and improved cash conversion reduce operating leverage and fund deleveraging. Lower capex guidance and SG&A declines indicate structural efficiency gains that can sustainably boost margins and free cash flow over subsequent quarters.

Negative Factors

Margin Compression

Substantial margin deterioration versus prior years reflects mix shifts, price concessions and higher input costs. Persistently lower margins erode the firm's earnings power, reduce buffer for cost shocks, and limit the pace of deleveraging and reinvestment over the medium term.

Elevated Leverage

High absolute debt levels constrain strategic flexibility and increase refinancing and interest-rate vulnerability. If margins remain pressured, servicing leverage will reduce capacity for growth investments, share repurchases, or opportunistic M&A in the coming 2–6 months.

International Operational & Mix Headwinds

Structural challenges abroad—underutilization in Europe, price weakness and an Argentina plant closure with $50M–$60M charges—imply ongoing disruption and margin drag. Consolidation and restart costs will weigh on international profitability for multiple quarters.

Lamb Weston Holdings Business Overview & Revenue Model

Company Description

Lamb Weston Holdings, Inc. produces, distributes, and markets value-added frozen potato products worldwide. It operates through four segments: Global, Foodservice, Retail, and Other. The company offers frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston brand, as well as under various customer labels. The company also offers its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers' brands. In addition, it engages in the vegetable and dairy businesses. The company serves retail and foodservice customers; and grocery, mass merchants, club, and specialty retailers; and businesses, educational institutions, independent restaurants, regional chain restaurants, and convenience stores. Lamb Weston Holdings, Inc. was incorporated in 1950 and is headquartered in Eagle, Idaho.

How the Company Makes Money

Lamb Weston makes money primarily by selling frozen potato products—most notably frozen french fries and other value-added potato items—to a mix of large foodservice and retail customers. Revenue is generated through (1) sales to foodservice operators (including quick-service and full-service restaurants) and food distributors, where Lamb Weston supplies branded and/or customer-specified products, and (2) sales into retail channels, where products are sold to grocery and other consumer outlets. The company’s earnings are influenced by volume sold, pricing and mix (e.g., higher value-added or specialty cuts/coatings), and its ability to manage input and operating costs such as potatoes, edible oils, packaging, transportation, energy, and labor. Additional factors that can contribute to results include long-term customer supply arrangements, capacity utilization at processing facilities, and export/international sales; if more specific partnership terms, customer concentration details, or segment-level revenue breakdowns are required, they are null.

Lamb Weston Holdings Financial Statement Overview

Summary

Strong TTM revenue growth (+26.6%) and a clear rebound in free cash flow (~$651M) support the near-term picture, but profitability has compressed meaningfully versus FY2023–FY2024 (TTM net margin ~6.1%) and leverage remains high (debt-to-equity ~2.25x), limiting flexibility if margins stay pressured.

Income Statement

TTM (Trailing-Twelve-Months) revenue grew strongly (+26.6%), and profitability is still solid with ~22.1% gross margin and ~17.3% EBITDA margin. However, earnings power has clearly stepped down versus the prior two annual periods: net margin is ~6.1% TTM vs ~11.2% in FY2024 and ~18.9% in FY2023, and operating margins also compressed, suggesting higher costs and/or weaker pricing/mix. Overall: good top-line momentum, but margin volatility is the key weakness.

Balance Sheet

Leverage is the main constraint: TTM debt-to-equity is ~2.25x (still elevated), even though it improved from higher levels seen in prior years. Equity is meaningful (~$1.75B TTM), but debt remains large (~$3.94B TTM) relative to the capital base, limiting flexibility if profits stay pressured. Returns on equity are healthy (~22.7% TTM), but they are notably lower than the unusually high levels seen in FY2023–FY2024, reinforcing that the balance sheet looks more leveraged than it looks “under-earning.”

Cash Flow

Cash generation improved materially in TTM: operating cash flow is strong (~$969M) and free cash flow rebounded to ~+$651M (vs negative free cash flow in FY2024 and low free cash flow in FY2025). That said, cash conversion is not consistently strong: TTM free cash flow is only ~67% of net income, and the historical swings (including negative free cash flow in FY2024) point to working-capital and/or capital spending volatility. Overall: better current cash flow profile, but not yet a steady multi-year pattern.

Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	6.47B	6.45B	6.47B	5.35B	4.10B	3.67B
Gross Profit	1.43B	1.40B	1.77B	1.43B	832.00M	832.00M
EBITDA	1.12B	1.07B	1.37B	1.10B	636.50M	662.60M
Net Income	392.30M	357.20M	725.50M	1.01B	200.90M	317.80M
Balance Sheet
Total Assets	7.33B	7.39B	7.37B	6.52B	4.14B	4.21B
Cash, Cash Equivalents and Short-Term Investments	82.70M	70.70M	71.40M	304.80M	525.00M	783.50M
Total Debt	3.94B	4.16B	3.85B	3.49B	2.75B	2.77B
Total Liabilities	5.58B	5.65B	5.58B	5.11B	3.78B	3.73B
Stockholders Equity	1.75B	1.74B	1.79B	1.41B	360.50M	480.60M
Cash Flow
Free Cash Flow	650.80M	230.10M	-131.30M	107.70M	128.50M	405.50M
Operating Cash Flow	969.40M	868.30M	798.20M	761.70M	418.60M	552.70M
Investing Cash Flow	-300.40M	-648.00M	-984.10M	-1.34B	-310.50M	-162.50M
Financing Cash Flow	-670.10M	-225.00M	-48.00M	340.80M	-363.40M	-974.00M

Lamb Weston Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 41.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LW, the sentiment is Negative. The current price of 41.46 is below the 20-day moving average (MA) of 45.15, below the 50-day MA of 45.25, and below the 200-day MA of 52.90, indicating a bearish trend. The MACD of -1.72 indicates Positive momentum. The RSI at 34.19 is Neutral, neither overbought nor oversold. The STOCH value of 14.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LW.

Lamb Weston Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INGR	74 Outperform	$7.01B	9.71	17.25%	2.86%	-3.83%	-2.04%
LW	65 Neutral	$5.76B	31.72	22.69%	3.37%	2.35%	9.61%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
SJM	61 Neutral	$10.81B	-3.86	-21.55%	4.45%	-0.66%	-326.55%
POST	61 Neutral	$4.58B	13.23	8.49%	―	2.97%	-2.68%
CAG	58 Neutral	$7.44B	-3.16	-1.13%	7.87%	-5.82%	-119.70%
CPB	54 Neutral	$6.28B	14.14	13.98%	5.64%	2.71%	4.90%

Lamb Weston Holdings Corporate Events

Lamb Weston Appoints New Executive Chair and Incoming CFO

On February 4, 2026, Lamb Weston announced that its board appointed former Budweiser APAC chief executive Jan Eli B. Craps as Executive Chair effective February 6, 2026, under a three-year term featuring a heavily equity-based compensation package with time-vested restricted stock units, deeply out-of-the-money stock options and a significant personal share purchase requirement, all designed to align his interests with long-term shareholder value. The company also named James D. Gray, currently executive vice president and chief financial officer of Ingredion, as its next chief financial officer effective April 2, 2026, with a mix of salary, annual bonus, long-term incentives, sign-on awards and stock-purchase-matched RSUs, while outgoing CFO Bernadette M. Madarieta will remain in place through April 1, 2026 to ensure a smooth transition. In parallel, on February 2, 2026 the board’s compensation committee approved substantial supplemental incentive awards of RSUs and premium-priced stock options for key executives, including CEO Michael J. Smith and other named executive officers, to support execution of the company’s “Focus to Win” strategy, and adopted a 2026 Inducement Stock Plan reserving 2 million shares to recruit and retain external talent, under which most of the equity grants to Craps and Gray will be made, signaling an aggressive, equity-driven approach to leadership recruitment, retention and performance alignment.

The most recent analyst rating on (LW) stock is a Hold with a $48.00 price target. To see the full list of analyst forecasts on Lamb Weston Holdings stock, see the LW Stock Forecast page.

Lamb Weston to Close Argentina Plant, Consolidate Production

On January 5, 2026, Lamb Weston Holdings, Inc. approved a plan to close its manufacturing facility in Munro, Argentina, and consolidate production for the Latin America region into its new plant in Mar del Plata as part of an initiative to improve operating efficiency. The company expects to record approximately $50 million to $60 million in pre-tax charges, largely during its fiscal year ending May 31, 2026, with about half representing cash outlays; these charges will primarily stem from write-downs of long-lived assets and inventory, employee severance and other termination benefits, costs tied to unused contracted raw potatoes, and related closure expenses, affecting both its cost structure and workforce in the region.

The most recent analyst rating on (LW) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Lamb Weston Holdings stock, see the LW Stock Forecast page.