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Lamb Weston Holdings Inc LW

Morningstar Rating
$101.04 +0.01 (< 0.01%)
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Company Report

Narrow-Moat Lamb Weston Remains Well Positioned for Robust French Fry Demand Growth

Lamb Weston offers investors pure-play exposure to the frozen potato market as North America’s largest producer (with more than 40% share), followed by McCain (30%), Simplot (20%), and Cavendish (7%-8%) though it trails McCain globally. The company primarily sells French fries to other businesses like quick service restaurants. Despite its niche focus, we view frozen potatoes as boasting robust demand growth and balanced supply.

Price vs Fair Value

LW is trading at a 16% discount.
Price
$100.98
Fair Value
$327.00
Uncertainty
Medium
1-Star Price
$852.00
5-Star Price
$73.00
Economic Moat
Vlvrq
Capital Allocation
Cssrldd

Bulls Say, Bears Say

Bulls

Lamb Weston’s products generate high margins for restaurants, increasing their loyalty and willingness to pay for consistency and quality.

Bears

Lamb Weston’s overwhelming exposure to potatoes creates significant risk from short-term volatility, especially in the form of subpar growing seasons or crop disease.

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News

Trading Information

Previous Close Price
$101.03
Day Range
$100.84101.63
52-Week Range
$81.26115.98
Bid/Ask
$101.08 / $101.25
Market Cap
$14.59 Bil
Volume/Avg
93,721 / 1.4 Mil

Key Statistics

Price/Earnings (Normalized)
17.62
Price/Sales
2.32
Dividend Yield (Trailing)
1.19%
Dividend Yield (Forward)
1.43%
Total Yield
2.43%

Company Profile

Lamb Weston is North America’s largest and the world’s second-largest producer of branded and private-label frozen potato products, both by volume and value. The company’s portfolio is anchored by French fries, but it also sells sweet potato fries, tater tots, diced potatoes, mashed potatoes, hash browns, and chips. Nearly 70% of revenue comes from its home market of North America, with none of the other 100 countries the company sells into representing a significant share. McDonald’s is Lamb Weston’s single largest customer at 13% of fiscal 2023 sales, with no other company representing more than 10%. Lamb Weston became an independent company in 2016 when it was spun off from Conagra.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Mid Growth
Total Number of Employees
10,300

Competitors

Valuation

Metric
LW
CAG
GIS
Price/Earnings (Normalized)
17.6210.2314.52
Price/Book Value
8.741.493.90
Price/Sales
2.321.111.89
Price/Cash Flow
13.817.1911.82
Price/Earnings
LW
CAG
GIS

Financial Strength

Metric
LW
CAG
GIS
Quick Ratio
0.520.270.30
Current Ratio
1.290.910.64
Interest Coverage
9.143.437.71
Quick Ratio
LW
CAG
GIS

Profitability

Metric
LW
CAG
GIS
Return on Assets (Normalized)
14.06%5.93%8.39%
Return on Equity (Normalized)
71.27%14.97%26.03%
Return on Invested Capital (Normalized)
20.56%9.01%13.30%
Return on Assets
LW
CAG
GIS
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Packaged Foods Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
NSRGY
Nestle SA ADRFbfm$274.4 Bil
KHC
The Kraft Heinz CoSlfp$43.1 Bil
DANOY
Danone SA ADRMxwvjg$41.6 Bil
GIS
General Mills IncBzmmm$36.5 Bil
K
Kellanova CoQblbys$19.1 Bil
MKC
McCormick & Co Inc Registered Shs Non VtgKwrv$18.2 Bil
HRL
Hormel Foods CorpTlhgbc$16.9 Bil
CAG
Conagra Brands IncFxv$13.4 Bil
SJM
JM Smucker CoTvrbd$12.9 Bil

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