Lamb Weston Holdings (LW) Receives a Buy from Jefferies


Jefferies analyst Akshay Jagdale maintained a Buy rating on Lamb Weston Holdings (LW) today and set a price target of $85. The company’s shares closed on Friday at $71.63.

Jagdale noted:

“Concerns of margin compression driven by incremental capacity coming online in 2020 are overblown as they ignore the strong demand environment and tight utilization rates. In fact, we expect NA fry pricing to strengthen further driven by a worsening of the shortage in the EU. We expect industry pricing to exceed cost inflation and for LW’s incremental capacity to result in share gains driving further earnings upside in FY20. We maintain our Buy rating $85. We would be buyers of weakness. LW’s stock has significantly underperformed since the 3Q release and YTD (-3% vs +15% for S&P 500) owing to fears that incremental capacity coming online in 2020 will cause significant margin pressure and negative earnings revisions.”

According to TipRanks.com, Jagdale is a 4-star analyst with an average return of 4.3% and a 53.3% success rate. Jagdale covers the Consumer Goods sector, focusing on stocks such as McCormick & Company, Conagra Brands Inc, and J & J Snack Foods.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Lamb Weston Holdings with a $83.33 average price target, representing a 16.3% upside. In a report issued on April 3, Stifel Nicolaus also maintained a Buy rating on the stock with a $82 price target.

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Lamb Weston Holdings’ market cap is currently $10.49B and has a P/E ratio of 23.07. The company has a Price to Book ratio of -186.58.

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Lamb Weston Holdings, Inc. engages in the production, distribution, and marketing of value-added frozen potato products. It operates through the following business segments: Global, Foodservice, Retail, and Other. The Global segment includes branded and private label frozen potato products sold in North America and international markets.

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