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Lamb Weston Holdings (LW)
:LW
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Lamb Weston Holdings (LW) AI Stock Analysis

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LW

Lamb Weston Holdings

(NYSE:LW)

Rating:68Neutral
Price Target:
$59.00
▲(3.38%Upside)
Lamb Weston Holdings maintains strong financial performance and positive momentum, though valuation concerns and market challenges exist. The strategic initiatives and leadership changes could drive future growth.
Positive Factors
Cost Savings
The cost savings program 'Focus to Win' is expected to deliver ~$250mm+ in annualized savings by FY28 end.
Earnings
The 4Q results exceeded expectations due to volume growth and stronger business execution.
Management Strategy
Management laid out a credible plan for improving their reputation with investors after two years of missing expectations.
Negative Factors
Pricing Pressure
Pricing pressure is expected to continue through FY27 due to local competitors ramping their recent capacity additions to full utilization.
QSR Traffic
The 4Q guide implies a weak start to FY26 owing to poor cost absorption, tough comparisons, and deteriorating QSR traffic.
Sales Growth
The company expects FY26 organic sales growth to be flat or slightly negative, driven by the negative impact from lower priced customer contracts.

Lamb Weston Holdings (LW) vs. SPDR S&P 500 ETF (SPY)

Lamb Weston Holdings Business Overview & Revenue Model

Company DescriptionLamb 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 MoneyLamb Weston makes money primarily through the sale of its frozen potato products to a diverse customer base comprising foodservice distributors, restaurants, and retail outlets. The company generates revenue by leveraging its extensive manufacturing capabilities and logistics network to deliver high-quality potato products across different regions. Key revenue streams include long-term contracts with major fast-food chains and partnerships with supermarket giants, ensuring a consistent demand for their offerings. Additionally, Lamb Weston invests in research and development to innovate and expand its product line, which helps maintain its competitive edge and drives sales growth.

Lamb Weston Holdings Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q3-2025)
|
% Change Since: 16.83%|
Next Earnings Date:Oct 02, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company navigating a challenging macroeconomic environment with successful volume and sales growth, strategic cost reductions, and innovative product launches. However, the company faces significant challenges, including soft restaurant traffic, price/mix declines, and increased costs, particularly in the international segment.
Q3-2025 Updates
Positive Updates
Volume and Sales Growth
In the third quarter, Lamb Weston grew volume by 9%, increased net sales by 4%, and grew adjusted EBITDA by 6%, reflecting efforts to regain business, grow volume, and lower expenses.
Cost Reduction and Efficiency Plans
Lamb Weston is on track to deliver at least $55 million of pretax savings in fiscal 2025 and $85 million in fiscal 2026 through restructuring and operational efficiencies.
Innovation and Product Expansion
The company launched new battered and seasoned products, fridge-friendly fries, and expanded its brand portfolio with products like Onion Rings and Cheesy Potato Bites, receiving positive feedback.
Strong Liquidity Position
Lamb Weston ended the third quarter with approximately $1.1 billion of liquidity, maintaining a leverage ratio of 3.4x.
Negative Updates
Soft Restaurant Traffic
QSR traffic worsened during the fiscal third quarter, with a 2% decline compared with the prior year quarter. Traffic at hamburger-specializing QSR chains was down about twice as much.
Price/Mix Decline
Price/mix declined 5% compared to the prior year quarter due to planned investments in price to compete in a competitive environment.
Increased Costs and Inventory Levels
Higher overall transportation and warehousing costs were driven by higher inventory levels, impacting adjusted gross profit.
International Segment Challenges
The International segment saw an 8.5 million decline in adjusted EBITDA due to unfavorable price/mix and competitive pressures.
Company Guidance
During the Lamb Weston Third Quarter FY 2025 Earnings Call, the company outlined several key metrics and strategic initiatives aimed at enhancing operational efficiency and driving growth. Notably, Lamb Weston achieved a 9% increase in volume, a 4% growth in net sales, and a 6% rise in adjusted EBITDA compared to the prior year. The company announced it is on track to deliver at least $55 million in pretax savings for fiscal 2025 and $85 million in fiscal 2026 through its restructuring plan. It also highlighted ongoing contract negotiations, predicting a mid-single-digit percent decline in potato prices for the 2025 crop. Despite challenges in the consumer market and competitive price pressures, Lamb Weston maintained its full-year revenue guidance between $6.35 billion to $6.45 billion and adjusted EBITDA guidance between $1.17 billion to $1.21 billion. Furthermore, the company has engaged AlixPartners to accelerate an end-to-end value creation plan, with over 30 projects underway to optimize costs and improve customer value propositions.

Lamb Weston Holdings Financial Statement Overview

Summary
Lamb Weston Holdings shows strong revenue growth and profitability margins, though net income has declined and debt reliance is increasing. Despite these concerns, efficient cash flow management and operational efficiency are evident.
Income Statement
75
Positive
Lamb Weston Holdings shows a strong income statement with consistent revenue growth and healthy profitability margins. The company achieved a Gross Profit Margin of 21.67% and a Net Profit Margin of 5.54% in the latest report. However, the Net Profit has decreased notably from the previous year, indicating potential pressure on net earnings.
Balance Sheet
68
Positive
The balance sheet reflects moderate leverage with a Debt-to-Equity Ratio of 2.39. The Return on Equity (ROE) is 20.55%, which is a strong indicator of profitability relative to equity. However, the Equity Ratio is 23.51%, suggesting a higher reliance on debt financing.
Cash Flow
70
Positive
Lamb Weston Holdings demonstrates solid cash flow management with a positive Free Cash Flow of $230.1 million. The Operating Cash Flow to Net Income Ratio is 2.43, indicating efficient conversion of income to cash. The Free Cash Flow to Net Income Ratio is 0.64, reflecting a stable cash flow situation despite some fluctuations in capital expenditures.
BreakdownDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue6.45B6.47B5.35B4.10B3.67B
Gross Profit1.40B1.77B1.43B832.00M832.00M
EBITDA1.07B1.37B1.10B636.50M662.60M
Net Income357.20M725.50M1.01B200.90M317.80M
Balance Sheet
Total Assets7.39B7.37B6.52B4.14B4.21B
Cash, Cash Equivalents and Short-Term Investments70.70M71.40M304.80M525.00M783.50M
Total Debt4.16B3.85B3.49B2.75B2.77B
Total Liabilities5.65B5.58B5.11B3.78B3.73B
Stockholders Equity1.74B1.79B1.41B360.50M480.60M
Cash Flow
Free Cash Flow230.10M-131.30M107.70M128.50M405.50M
Operating Cash Flow868.30M798.20M761.70M418.60M552.70M
Investing Cash Flow-648.00M-984.10M-1.34B-310.50M-162.50M
Financing Cash Flow-225.00M-48.00M340.80M-363.40M-974.00M

Lamb Weston Holdings Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price57.07
Price Trends
50DMA
53.44
Positive
100DMA
52.91
Positive
200DMA
59.62
Negative
Market Momentum
MACD
1.46
Negative
RSI
55.58
Neutral
STOCH
69.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LW, the sentiment is Neutral. The current price of 57.07 is above the 20-day moving average (MA) of 53.27, above the 50-day MA of 53.44, and below the 200-day MA of 59.62, indicating a neutral trend. The MACD of 1.46 indicates Negative momentum. The RSI at 55.58 is Neutral, neither overbought nor oversold. The STOCH value of 69.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LW.

Lamb Weston Holdings Risk Analysis

Lamb Weston Holdings disclosed 27 risk factors in its most recent earnings report. Lamb Weston Holdings reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Lamb Weston Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$8.46B13.8817.00%2.43%-5.16%4.95%
72
Outperform
$5.90B19.099.15%1.48%9.36%
70
Outperform
$8.84B7.7113.27%7.56%-3.64%231.77%
68
Neutral
$7.80B22.3720.26%2.63%-0.25%-49.73%
65
Neutral
$9.52B21.0911.67%4.76%8.65%-38.57%
64
Neutral
$22.84B13.40-0.89%3.13%3.00%-17.67%
56
Neutral
$11.45B22.22-17.87%3.99%6.69%-261.87%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LW
Lamb Weston Holdings
55.99
0.96
1.74%
CPB
Campbell Soup
32.33
-14.61
-31.12%
CAG
Conagra Brands
18.51
-9.80
-34.62%
SJM
JM Smucker
108.25
-8.03
-6.91%
POST
Post Holdings
105.54
-5.60
-5.04%
INGR
Ingredion
126.37
9.15
7.81%

Lamb Weston Holdings Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Lamb Weston Announces Board Restructuring Agreement
Positive
Jun 30, 2025

On June 30, 2025, Lamb Weston Holdings announced a Cooperation Agreement with JANA Partners and Continental Grain, leading to significant changes in its Board of Directors. The agreement involves the resignation of four directors and the appointment of six new independent directors, including Bradley Alford as the new Chairman. This strategic move is expected to enhance Lamb Weston’s industry positioning and shareholder value by leveraging the new directors’ expertise and leadership experience.

The most recent analyst rating on (LW) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Lamb Weston Holdings stock, see the LW Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 26, 2025