Lamb Weston (NYSE: LW) experienced a significant decline on Monday, with its stock price reaching a new 52-week low of $41.40. The shares were last traded at $41.43, down from a previous close of $42.29, with a trading volume of 2,206,939 shares. This decline has raised questions among investors about the company’s future and whether it is time to sell.
Analysts Provide Diverging Insights
Recent reports from various brokerages reflect mixed sentiments regarding Lamb Weston’s stock performance. On December 12, 2023, Jefferies Financial Group increased its target price from $67.00 to $70.00, maintaining a “buy” rating for the stock. In contrast, Barclays adjusted its price objective downward from $68.00 to $55.00, categorizing the company as “overweight.”
Moreover, TD Cowen reduced its target price from $60.00 to $55.00 while assigning a “hold” rating. Wells Fargo & Company also lowered its price objective from $68.00 to $54.00, maintaining an “overweight” stance. Finally, Deutsche Bank Aktiengesellschaft decreased its target price from $61.00 to $49.00, suggesting a “hold” rating for the stock.
Currently, three research analysts have given Lamb Weston a Buy rating, while twelve have issued a Hold rating. According to MarketBeat.com, the overall consensus rating stands at “Hold,” with an average target price of $54.18.
Lamb Weston’s Financial Performance
Lamb Weston’s recent quarterly earnings report, published on December 19, 2023, revealed a profit of $0.69 earnings per share (EPS), exceeding analysts’ expectations of $0.68 by a narrow margin. The company reported revenues of $1.62 billion for the quarter, surpassing the consensus estimate of $1.59 billion.
The firm also noted a return on equity of 27.71% and a net margin of 6.06%. Notably, this revenue figure represents a 1.1% increase year-over-year, compared to $0.66 EPS during the same period last year. Looking ahead, industry analysts project that Lamb Weston will post an EPS of 3.1 for the current fiscal year.
Dividend Announcement and Institutional Activity
In a positive move for shareholders, Lamb Weston has announced a quarterly dividend of $0.38 per share, which will be paid on February 27, 2024. Investors of record on January 30, 2024, will receive this dividend, which marks an increase from the previous quarterly dividend of $0.37. This translates to an annualized dividend of $1.52 and a yield of 3.7%. The company’s dividend payout ratio stands at 53.24%.
Institutional investors have been active in the market, with several notable transactions in recent months. Hudson Bay Capital Management LP acquired a new position in Lamb Weston valued at approximately $719,000 during the third quarter. Additionally, Allworth Financial LP increased its holdings by 40.1%, now owning 1,817 shares worth $106,000 after acquiring an additional 520 shares.
Swiss Life Asset Management Ltd also entered a new position in the company, valued at around $347,000, while ARQ Wealth Advisors LLC acquired shares worth $568,000. CIBC Private Wealth Group LLC raised its holdings by 48.6%, owning 3,275 shares worth $190,000 after purchasing an additional 1,071 shares. Institutional investors and hedge funds currently hold 89.56% of Lamb Weston’s stock.
Lamb Weston, based in Eagle, Idaho, has established itself as a leading global processor and supplier of frozen potato products. Founded in 1950, the company’s diverse portfolio includes French fries, potato wedges, and specialty cuts, catering to both the foodservice and retail grocery markets. As the company navigates its current challenges, investors will be closely monitoring further developments and financial disclosures.
