Lamb Weston Holdings, Inc. (LW) | Investment Case

1. Company Snapshot

1.a. 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.

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1.b. Last Insights on LW

Lamb Weston Holdings, Inc.'s recent performance was positively driven by strong Q1 2026 earnings, beating top and bottom line estimates. The company's revenue grew 0.6% year-over-year to $1.66 billion, with volume gains offsetting lower pricing. Cost control initiatives, including its Focus to Win cost-saving plan, drove better-than-expected profits. Analysts boosted their forecasts after the company's better-than-expected Q1 results. The company's sustained demand for frozen potato products in the US and internationally also contributed to its performance.

1.c. Company Highlights

Last Price	59.7
Change Percentage	-0.09%
Open	59.53
Previous Close	59.76
Market Cap ( Millions)	8319
Volume	778842
Year High	83.98
Year Low	47.87
M A 50	61.12
M A 200	55.61

FCF Yield	6.01%
Dividend Yield	2.48%
ROE	17.32%
Debt / Equity	223.02%
Net Debt / EBIDTA	380.62%
Price To Book	4.65
Price Earnings Ratio	28.32
Price To FCF	16.63
Price To sales	1.29
EV / EBITDA	11.94

2. Lamb Weston's Q1 FY2026 Earnings: Strong Volume Growth and Cost Savings Drive Performance

Lamb Weston's first quarter fiscal 2026 financial performance exceeded expectations, driven by a 6% overall volume growth, which was a key highlight of the earnings report. The company's revenue was impacted by a 7% decline in price mix due to prior year pricing investments and ongoing customer support. Adjusted gross profit declined due to unfavorable price mix, partly offset by higher volumes and cost savings. The company's adjusted EPS came in at $0.74, beating estimates of $0.54. Adjusted SG&A expenses declined by $24 million due to cost savings initiatives, contributing to an adjusted EBITDA that was essentially flat at $302 million.

Publication Date: Oct -02

                                    📋 Highlights
                                    Volume Growth Outperforms:
                                                6% overall volume growth, driven by North America and Asia, exceeding expectations despite 7% price mix decline.
Cost Savings Deliver Results:
                                                Adjusted SG&A drops $24M from initiatives, with $100M total savings target on track for fiscal 2026.
Adjusted EBITDA Stability:
                                                Remains flat at $302M, offsetting price mix headwinds and currency impacts through volume and cost efficiencies.
Strategic Expansion Gains Momentum:
                                                New Argentina plant operational, plus accelerated focus on QSR and convenience stores driving customer wins.
Outlook Reaffirmed:
                                                Revenue guided to $6.35–$6.55B, EBITDA at $1–$1.2B, with gross margin expected to stabilize in Q3 despite Q2 pressures.

                                

Segment Performance

The company's North America segment drove the volume growth, with gains in customer retention and new customer wins. International segment volume growth was also notable, although it is expected to be flat in the second half as the company laps prior year acquisitions and navigates a competitive environment. The recent restart of a previously curtailed production line in the US is a positive sign of continued demand.

Outlook and Guidance

Lamb Weston reaffirmed its fiscal 2026 outlook, with revenue expected to be between $6.35 billion and $6.55 billion, representing a 2% decline to a 2% increase at constant currency. Adjusted EBITDA is expected to be between $1 billion and $1.2 billion. The company expects volume growth in North America throughout the year and anticipates a strong potato crop in North America and Europe, which is expected to contribute to its long-term growth and profitability.

Strategic Initiatives

The company is executing its "Focus to Win" strategic plan, which includes strengthening customer partnerships, driving executional excellence, and setting the pace for innovation. Lamb Weston is expanding its business with quick-service restaurants, convenience stores, and other away-from-home channels, driven by a focus on service, quality, and consistency. The company is on track to achieve its $100 million cost savings target for fiscal 2026.

Valuation and Return Metrics

With a P/E Ratio of 29.47, P/B Ratio of 4.84, and EV/EBITDA of 13.52, the company's valuation multiples indicate a premium valuation. However, the company's ROIC of 8.66% and ROE of 17.32% suggest a strong return on investment. Analysts estimate next year's revenue growth at 2.6%, which may impact the company's valuation multiples. The company's dividend yield of 2.37% and free cash flow yield of 5.78% provide a relatively attractive return for investors.

3. NewsRoom

Lamb Weston (NYSE:LW) Given Average Recommendation of “Hold” by Analysts

Nov -29

Source: defenseworld.net

AXQ Capital LP Sells 10,585 Shares of Lamb Weston $LW

Nov -25

Source: defenseworld.net

Financial Analysis: George Weston (OTCMKTS:WNGRF) vs. Lamb Weston (NYSE:LW)

Nov -21

Source: defenseworld.net

Lamb Weston to Announce Fiscal Year 2026 Second Quarter Financial Results on December 19, 2025

Nov -19

Source: businesswire.com

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Nov -17

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Jana Partners Reduces Stake in Mercury Systems Inc.

Nov -15

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Jana Partners' Strategic Move: Significant Addition of The Cooper Companies Inc

Nov -14

Source: gurufocus.com

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Nov -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.89%)

6. Segments

Global

Expected Growth: 6.0%

Lamb Weston Holdings, Inc.'s 6.0% global growth is driven by increasing demand for frozen potato products, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on innovation, product diversification, and operational efficiencies have contributed to its growth momentum.

Foodservice

Expected Growth: 5.5%

Lamb Weston Holdings, Inc.'s Foodservice segment growth of 5.5% is driven by increasing demand for frozen potato products in restaurants and other foodservice channels, expansion into new markets, and product innovation. Additionally, the company's strategic pricing initiatives, effective supply chain management, and strong relationships with key customers contribute to the segment's growth.

Retail

Expected Growth: 6.2%

Lamb Weston Holdings, Inc.'s Retail segment growth of 6.2% is driven by increasing demand for frozen potato products, expansion in emerging markets, and strategic partnerships with major foodservice chains. Additionally, the company's focus on innovation, quality, and customer service has led to market share gains and pricing power.

Other

Expected Growth: 5.8%

Lamb Weston Holdings, Inc.'s 5.8% growth in 'Other' segment is driven by increasing demand for frozen potato products in international markets, particularly in Asia and Latin America. Additionally, the company's strategic acquisitions and investments in new product lines, such as sweet potato and vegetable-based offerings, have contributed to the segment's growth.

7. Detailed Products

Frozen Potatoes

Lamb Weston offers a wide range of frozen potato products, including fries, hash browns, and potato patties, designed to meet the needs of restaurants, foodservice providers, and retailers.

Sweet Potato Products

The company provides a variety of sweet potato-based products, including frozen sweet potato fries, sweet potato patties, and sweet potato hash browns.

Appetizers and Snacks

Lamb Weston offers a range of frozen appetizers and snacks, including onion rings, cheese sticks, and mozzarella sticks.

Vegetable Products

The company provides a variety of frozen vegetable products, including broccoli, cauliflower, and carrots.

Customized Products

Lamb Weston offers customized frozen potato and vegetable products tailored to meet the specific needs of its customers.

8. Lamb Weston Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lamb Weston Holdings, Inc. is medium due to the availability of alternative products in the market, such as fresh potatoes and other frozen food products.

Bargaining Power Of Customers

The bargaining power of customers for Lamb Weston Holdings, Inc. is high due to the concentration of major customers, such as McDonald's and other large foodservice companies, which can exert significant pressure on prices and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Lamb Weston Holdings, Inc. is low due to the company's large scale of operations and its ability to negotiate favorable prices with suppliers.

Threat Of New Entrants

The threat of new entrants for Lamb Weston Holdings, Inc. is low due to the high barriers to entry, including the need for significant capital investment and the complexity of the frozen potato products market.

Intensity Of Rivalry

The intensity of rivalry for Lamb Weston Holdings, Inc. is medium due to the presence of several major competitors in the frozen potato products market, including McCain Foods and J.R. Simplot Company.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	71.21%
Debt Cost	4.41%
Equity Weight	28.79%
Equity Cost	7.91%
WACC	5.42%
Leverage	247.34%

11. Quality Control: Lamb Weston Holdings, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Lancaster Colony

A-Score: 5.7/10

Value: 3.6

Growth: 5.9

Quality: 7.1

Yield: 4.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

Hormel Foods

A-Score: 5.3/10

Value: 5.8

Growth: 4.0

Quality: 5.5

Yield: 7.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

McCormick

A-Score: 5.0/10

Value: 3.3

Growth: 4.2

Quality: 6.1

Yield: 5.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

Lamb Weston

A-Score: 4.3/10

Value: 4.0

Growth: 6.6

Quality: 4.3

Yield: 4.0

Momentum: 2.0

Volatility: 5.0

1-Year Total Return ->

Freshpet

A-Score: 3.3/10

Value: 2.1

Growth: 9.1

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

1-Year Total Return ->

BellRing Brands

A-Score: 3.1/10

Value: 5.4

Growth: 2.7

Quality: 6.1

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

1.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.42%

Lamb Weston Holdings, Inc. - US5132721045

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on LW

1.c. Company Highlights

Stable Momentum

Average Growth

Average Quality

Earnings Miss

Revenues Miss

Higher Growth

Medium Volatility

Weak Momentum

Earnings Beats

Revenues Beats

Fairly Valued

Average Yield

2. Lamb Weston's Q1 FY2026 Earnings: Strong Volume Growth and Cost Savings Drive Performance

Segment Performance

Outlook and Guidance

Strategic Initiatives

Valuation and Return Metrics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.89%)

6. Segments

Global

Expected Growth: 6.0%

Foodservice

Expected Growth: 5.5%

Retail

Expected Growth: 6.2%

Other

Expected Growth: 5.8%

7. Detailed Products

Frozen Potatoes

Sweet Potato Products

Appetizers and Snacks

Vegetable Products

Customized Products

8. Lamb Weston Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Lamb Weston Holdings, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

59.7$

Current Price

59.7$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA