Eagle, Idaho-based Lamb Weston Holdings, Inc. (LW) produces, distributes, and markets frozen potato products. Valued at $7.7 billion by market cap, the company offers fries, oven roasted potatoes, puffs, chips, slices, and prepared potato products.
Companies worth $2 billion or more are generally described as “mid-cap stocks,” and LW fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the packaged foods industry. Lamb Weston's dominant market position in North America and internationally, along with its diverse brand portfolio, drives its competitive advantage. The recent acquisitions further expand its global footprint and contributes to its strong growth. This strategic move allows the company to better serve international markets and capitalize on synergies for increased success.
Despite its notable strength, LW slipped 49.5% from its 52-week high of $105.55, achieved on Apr. 1, 2024. Over the past three months, LW stock has declined 20.5%, underperforming the S&P 500 Index’s ($SPX) 6% dip during the same time frame.
In the longer term, shares of LW dipped 20.2% over the past six months and plummeted 50% over the past 52 weeks, considerably underperforming SPX’s six-month 2.2% losses and 6.8% returns over the last year.
To confirm the bearish trend, LW has been trading below its 200-day moving average over the past year, with slight fluctuations. The stock is trading below its 50-day moving average since mid-December, 2024.
On Dec. 19, 2024, LW shares closed down more than 20% after reporting its Q2 results. Its adjusted EPS declined 54.5% year over year to $0.66. The company’s revenue stood at $1.6 billion, down 7.6% year over year.
In the competitive arena of packaged foods, Post Holdings, Inc. (POST) has taken the lead over LW, showing resilience with 9.5% gains over the past 52 weeks and a slight uptick on a six-month basis.
Wall Street analysts are moderately bullish on LW’s prospects. The stock has a consensus “Moderate Buy” rating from the 11 analysts covering it, and the mean price target of $65.73 suggests a potential upside of 23.3% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
