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LW

Lamb Weston Holdings NYSE:LW Stock Report

Last Price

US$82.65

Market Cap

US$11.9b

7D

4.1%

1Y

25.2%

Updated

16 Aug, 2022

Data

Company Financials +
LW fundamental analysis
Snowflake Score
Valuation2/6
Future Growth4/6
Past Performance1/6
Financial Health3/6
Dividends1/6

LW Stock Overview

Lamb Weston Holdings, Inc. produces, distributes, and markets value-added frozen potato products worldwide.

Lamb Weston Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Lamb Weston Holdings
Historical stock prices
Current Share PriceUS$82.65
52 Week HighUS$83.29
52 Week LowUS$49.71
Beta0.53
1 Month Change12.30%
3 Month Change32.45%
1 Year Change25.15%
3 Year Change21.10%
5 Year Change81.01%
Change since IPO143.09%

Recent News & Updates

Shareholder Returns

LWUS FoodUS Market
7D4.1%2.5%4.5%
1Y25.2%6.0%-8.9%

Return vs Industry: LW exceeded the US Food industry which returned 5.5% over the past year.

Return vs Market: LW exceeded the US Market which returned -9.6% over the past year.

Price Volatility

Is LW's price volatile compared to industry and market?
LW volatility
LW Average Weekly Movement3.5%
Food Industry Average Movement6.3%
Market Average Movement7.6%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.1%

Stable Share Price: LW is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: LW's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19508,000Tom Wernerhttps://www.lambweston.com

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.

Lamb Weston Holdings Fundamentals Summary

How do Lamb Weston Holdings's earnings and revenue compare to its market cap?
LW fundamental statistics
Market CapUS$11.88b
Earnings (TTM)US$200.90m
Revenue (TTM)US$4.10b

59.1x

P/E Ratio

2.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LW income statement (TTM)
RevenueUS$4.10b
Cost of RevenueUS$3.27b
Gross ProfitUS$832.00m
Other ExpensesUS$631.10m
EarningsUS$200.90m

Last Reported Earnings

May 29, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.40
Gross Margin20.30%
Net Profit Margin4.90%
Debt/Equity Ratio754.8%

How did LW perform over the long term?

See historical performance and comparison

Dividends

1.2%

Current Dividend Yield

70%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is LW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LW?

Other financial metrics that can be useful for relative valuation.

LW key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3.5x
Enterprise Value/EBITDA22.2x
PEG Ratio2.9x

Price to Earnings Ratio vs Peers

How does LW's PE Ratio compare to its peers?

LW PE Ratio vs Peers
The above table shows the PE ratio for LW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average21.4x
SJM J. M. Smucker
23.3x9.5%US$14.7b
CPB Campbell Soup
16.1x6.2%US$15.2b
CAG Conagra Brands
19x11.4%US$16.9b
FLO Flowers Foods
27.3x10.5%US$5.9b
LW Lamb Weston Holdings
59.1x20.6%US$11.9b

Price-To-Earnings vs Peers: LW is expensive based on its Price-To-Earnings Ratio (59.1x) compared to the peer average (21.4x).


Price to Earnings Ratio vs Industry

How does LW's PE Ratio compare vs other companies in the US Food Industry?

Price-To-Earnings vs Industry: LW is expensive based on its Price-To-Earnings Ratio (59.1x) compared to the US Food industry average (18.9x)


Price to Earnings Ratio vs Fair Ratio

What is LW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio59.1x
Fair PE Ratio28.9x

Price-To-Earnings vs Fair Ratio: LW is expensive based on its Price-To-Earnings Ratio (59.1x) compared to the estimated Fair Price-To-Earnings Ratio (28.9x).


Share Price vs Fair Value

What is the Fair Price of LW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LW ($82.65) is trading below our estimate of fair value ($133.12)

Significantly Below Fair Value: LW is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Lamb Weston Holdings forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


20.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LW's forecast earnings growth (20.6% per year) is above the savings rate (1.9%).

Earnings vs Market: LW's earnings (20.6% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: LW's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LW's revenue (7.2% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: LW's revenue (7.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LW's Return on Equity is forecast to be very high in 3 years time (65.7%).


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Past Performance

How has Lamb Weston Holdings performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-9.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LW has high quality earnings.

Growing Profit Margin: LW's current net profit margins (4.9%) are lower than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: LW's earnings have declined by 9.8% per year over the past 5 years.

Accelerating Growth: LW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LW had negative earnings growth (-36.6%) over the past year, making it difficult to compare to the Food industry average (5.4%).


Return on Equity

High ROE: Whilst LW's Return on Equity (55.73%) is outstanding, this metric is skewed due to their high level of debt.


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Financial Health

How is Lamb Weston Holdings's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: LW's short term assets ($1.7B) exceed its short term liabilities ($699.1M).

Long Term Liabilities: LW's short term assets ($1.7B) do not cover its long term liabilities ($3.1B).


Debt to Equity History and Analysis

Debt Level: LW's net debt to equity ratio (609.2%) is considered high.

Reducing Debt: LW had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: LW's debt is not well covered by operating cash flow (15.4%).

Interest Coverage: LW's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet


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Dividend

What is Lamb Weston Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.19%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LW's dividend (1.19%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: LW's dividend (1.19%) is low compared to the top 25% of dividend payers in the US market (3.96%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, LW has been paying a dividend for less than 10 years.

Growing Dividend: LW's dividend payments have increased, but the company has only paid a dividend for 6 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (69.5%), LW's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (110%), LW's dividend payments are not well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

Tom Werner (56 yo)

5.75yrs

Tenure

US$7,858,113

Compensation

Mr. Thomas P. Werner, also known as Tom, has been the Chief Executive Officer and President of Lamb Weston Holdings, Inc. since November 2016. Mr. Werner served as the President of Commercial Foods at Cona...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD7.86M) is below average for companies of similar size in the US market ($USD12.87M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: LW's management team is considered experienced (3 years average tenure).


Board Members

Experienced Board: LW's board of directors are considered experienced (5.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: LW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Lamb Weston Holdings, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Lamb Weston Holdings, Inc.
  • Ticker: LW
  • Exchange: NYSE
  • Founded: 1950
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Implied Market Cap: US$11.879b
  • Shares outstanding: 143.72m
  • Website: https://www.lambweston.com

Number of Employees


Location

  • Lamb Weston Holdings, Inc.
  • 599 South Rivershore Lane
  • Eagle
  • Idaho
  • 83616
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/16 00:00
End of Day Share Price2022/08/16 00:00
Earnings2022/05/29
Annual Earnings2022/05/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.