LW
Lamb Weston Holdings, Inc.$46.03
Unclear
Target $50.13
Report: Mar 07, 2026Consumer Defensive • Packaged Foods • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$46.03+8.9%
Rec: UnclearConviction: Medium
Entry Target
$38.56
(16% below current)
Fair Value
$50.13
(9% above current)
Stop Loss
$39.79
(14% below current)
Position Size
Starter
Time Horizon
Transitional (12-24 Months)
Key Metrics
Live Snapshot
Market Data
52 Week High$67.07
52 Week Low$39.60
Avg. 3 Month Volume3.21M
Efficiency
LTM Gross Margin22.1%
LTM EBITDA Margin17.3%
LTM EBIT Margin11.3%
LTM Operating Margin11.3%
LTM ROA5.3%
LTM ROE22.7%
LTM ROIC8.4%
LTM ROCE12.5%
Capital Structure
Market Cap (MM)$5.9B
Enterprise Value (MM)$9.7B
Shares Outstanding139.40M
Total Debt (MM)$3.92B
Cash & Equivalents (MM)$82.70M
LTM Net Debt (MM)$3.84B
LTM Net Debt/EBITDA3.4x
Growth
TTM Rev. Growth2.3%
Last 3-Yr Rev. CAGR12.8%
Last 3-Yr EBITDA CAGR6.2%
Last 3-Yr EPS CAGR-5.3%
Valuation
Street Target Price$49.60
LTM EV/Revenue1.5x
LTM EV/Gross Profit6.8x
LTM EV/EBIT13.2x
LTM EV/EBITDA8.6x
LTM P/E15.0x
LTM EV/FCF14.6x
LTM P/FCF8.8x
LTM P/TB1.0x
LTM P/B3.3x
Dividend Yield3.5%
Payout Ratio53.0%
Executive SummarySituation: Current price is $46.03 versus fair value $50.13 (8.9% expected return), and valuation confidence is stable. Debate: Bull case depends on Margin Inflection Point Verification that the $250 million cost-savings program is flowing through to the bottom line, specifically a return to gross margins above 25%. Bear case centers on Lower-for-Longer Cyclical Downturn The risk that restaurant traffic remains structurally depressed due to consumer belt-tightening or the impact of GLP-1 drugs, preventing the expected volume recovery. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The bull case rests on the successful execution of the $250 million cost-savings program and a supply-side correction as competitors delay capacity additions, allowing Lamb Weston to restore margins toward its 23.7% historical average. Furthermore, the presence of JANA Partners provides a floor on valuation by forcing a strategic review or potential sale if operational targets are missed.
Bear Case
The bear case posits that the ERP failure caused permanent market share loss to McCain Foods and that structural headwinds, such as GLP-1 weight-loss drugs and health-conscious consumer trends, will lead to a long-term decline in fry demand, keeping capacity utilization low and margins depressed indefinitely.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Margin Inflection Point Verification that the $250 million cost-savings program is flowing through to the bottom line, specifically a return...
Near-Term (0-6 months)Impact: Critical
Strategic Review Announcement Potential for JANA Partners to force a formal review of strategic alternatives, including a sale of the intern...
Long-Term (18+ months)Impact: Moderate
Lamb Weston is relevant at this moment because it is trading near its 52-week low ($39.79) while undergoing a massive governance overhaul an...
Primary Risks
Concern: High
Lower-for-Longer Cyclical Downturn The risk that restaurant traffic remains structurally depressed due to consumer belt-tightening or the im...
Concern: Medium
Balance Sheet Leverage With net leverage at 3.4x and Debt/Equity at 237.8%, a prolonged earnings trough could lead to a breach of covenants...
Concern: Medium
The governance structure is currently in a 'Reset' phase following the JANA Partners cooperation agreement. The Outcome Tree is as follows:...
Recent Activity
2025-12-19SEC Filing (8-K)
-25.94%Lamb Weston reports Q2 FY2026 results with 1% net sales growth and reaffirms full-year guidance.
2025-10-01SEC Filing (8-K)
+6.77%Lamb Weston reports Q1 FY2026 results with net sales of $1.66B, reaffirming full-year outlook.
2025-07-23SEC Filing (8-K)
+16.31%Lamb Weston reports Q4 and FY 2025 results, announces 'Focus to Win' plan with $250M savings target
2025-04-03SEC Filing (8-K)
+10.01%Lamb Weston reports Q3 FY2025 results and reaffirms full-year outlook
2024-12-19SEC Filing (SC 13D/A)
-20.10%JANA Partners files Schedule 13D/A with Lamb Weston, increasing ownership to 5.0% and issuing public letter to board
Valuation Table
9.8/10Decision Grade
Scenario Range
$35
Bear
$250
Base
$78
Bull
$46