Does Lamb Weston Holdings Inc. (LW) Have A Risk Factor?

The stock of Lamb Weston Holdings Inc. (NYSE:LW) increased by increased by $1.85 on Friday to finish at $59.09, up 3.23 percent. The last five days have seen an average of 1,206,480 shares of common stock traded. 9 times new highs were reached in the current year, with a fall of -$19.65. The average number of shares traded over the last 20 days was 1,752,850, while the average volume over the last 50 days totaled 1,341,734.

LW stock dropped -2.12% since last month. On 10/07/21, the company’s shares reached a one-month low of $54.18. The stock touched a high of $86.41 on 03/08/21, after rallying from a low of $54.18 in 52 weeks. The price of LW stock has declined by -24.96% or -$19.65 this year, reaching a new high 9 times. Still, the stock price is down -31.62% from the 52-week high.


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Insider Transactions

There have been 5 days since Lamb Weston Holdings Inc. (LW) last reported insider trading activity on Oct 20. On Oct 20, Director NIBLOCK ROBERT A acquired 2,500 shares at $56.40 each. This transaction resulted in the insider spending $141,000. On Oct 11, Bensen Peter J added 5,000 shares at a price of US$55.75. After the transaction, the insider now owns 11,952 shares. President and CEO Werner Thomas P. had earlier sold 69,382 shares on Aug 02 for $67.16 a share. The transaction was completed for $4,659,945.

Valuation Metrics

Lamb Weston Holdings Inc. (LW) has a trailing price-to-earnings (P/E) ratio of 33.65. This level actually compares unfavorably with the industry at large, as the PE for the Packaged Foods industry stands at about 21.93. Further, its PE also compares unfavorably with the Consumer Defensive sector’s trailing 12 months PE ratio, which comes in at 25.23 right now. The PE ratio of Lamb Weston Holdings Inc. has varied between 50.18 and 13.85 in the last five years. Beta for the stock is 0.72. There are also a few other valuation ratios worth considering, including the trailing price-to-sales (P/S) ratio of 2.21, the price-to-book (PB) ratio of 20.24, and the price-to-cash flow ratio of 32.93.

Lamb Weston Holdings Inc.’s dividend is $0.94 per share per year. With a dividend yield of 1.59%, LW has a payout ratio of 52.70%. Company paid $0.2350 per share in dividends, remained unchanged from $0.2350 last year. A $0.0050 dividend increase was reported on Thursday December 17 2020, making it the 4 consecutive year the dividend has increased. Over the last three years, dividends have increased by -8.00%.

For the three months ended May 30, Lamb Weston Holdings Inc.’s quick ratio was 1.90, while its current ratio was 2.70, indicating its ability to pay off its debt. The company’s long-term debt to equity ratio for the quarter ending May 30 is 6.31, and the total debt to equity ratio is 6.39. As far as profitability goes, gross margin for the trailing twelve months is 20.30% percent. Lamb Weston Holdings Inc.’s EBITDA margin for the year ended May 30 was 17.91%, whereas its operating margin stood at 10.60% for the same period. Based on annual data, it had gross profit of $832.0 million and revenue of $3.67 billion.

Investors will also look at the performance of the company’s management in order to determine the potential profitability of their investment. LW’s return on assets (ROA) during the last 12 months has been 6.20%. There was a 11.90% return on investment (ROI) in the past year. In the meantime, the return on equity (ROE) for the last 12 months was 58.40%. ROE has averaged 12.06 in the past year for the broader industry.

Earnings Surprise

According to Lamb Weston Holdings Inc.’s quarterly financial report for the quarter that ended May 30. A lower net income was reported in the quarter under review than the previous quarter. Net income for the quarter came in at $984.2 million, while revenues rose by 11.45% to $1.01 billion. It was predicted that Lamb Weston Holdings Inc.’s quarterly earnings would be $0.44, but it ended up being $0.42, beating the consensus by 4.80%. EBITDA was $107.5 million for the quarter. At the end of Lamb Weston Holdings Inc.’s most recent quarter ended May 30, its liabilities totaled 3.75 billion, while its total debt was $2.89 billion. Equity owned by shareholders amounts to $146.07 million.

Technical Picture

Here’s a quick look at Lamb Weston Holdings Inc.’s (LW) price momentum from a technical perspective. As of 22 October, the RSI 9-day stood at 55.40%, suggesting the stock is Neutral, with a 32.28% historical volatility rate.

The stochastic %K and %D were 40.02% and 30.38% respectively, while the average true range (ATR) was 1.69. Based on the 14-day stochastic reading of 52.91%, the RSI (14) reading is 49.40%. On the 9-day MACD Oscillator, the stock is at 1.21, and the 14-day reading is at 0.43.

Analyst Ratings

In its most recent analyst report, Jefferies raised its rating on Lamb Weston Holdings Inc. (NYSE: LW) to a Buy. Prior to this, analysts firm rated the stock as a Hold. Analysts have assigned Lamb Weston Holdings Inc. (LW) an Overweight rating. LW is a stock that is recommended for selling by 0 brokerage firms, while 2 companies recommend holding. The stock is underweighted by 0 analysts. Among the analysts who rate the stock, 1 rate it overweight and 6 others recommend it as a buy.

What is LW’s price target for the next 12 months?

The current consensus forecast for the stock is between $66.00 and $85.00, with a median target price of $71.00. In analyzing these forecasts, the average price target given by analysts for Lamb Weston Holdings Inc. (LW) is $73.86.

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