Adversity is less terrifying than hope: Lamb Weston Holdings Inc. (LW)

Lamb Weston Holdings Inc. (NYSE: LW) stock fell -1.37% on Friday to $80.63 against a previous-day closing price of $81.75. With 1.07 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.29 million shares. During the session, the Packaged Foods company that operates in wider Consumer Defensive sector, reached to the highest price of $81.68 whereas the lowest price it dropped to was $80.08. The 52-week range on LW shows that it touched its highest point at $82.26 and its lowest point at $49.71 during that stretch. It currently has a 1-year price target of $84.57. With its current market cap of 11.22 billion, LW has annualized dividend of $0.98 while the current yield stands at 1.22%. Beta for the stock currently stands at 0.53.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of LW was up-trending over the past week, with a rise of 0.60%, but this was up by 9.66% over a month. Three-month performance surged to 22.37% while six-month performance rose 25.42%. The stock gained 23.31% in the past year, while it has gained 27.22% so far this year. A look at the trailing 12-month EPS for LW yields 1.38 with Next year EPS estimates of 3.75. For the next quarter, that number is 0.50. This implies an EPS growth rate of -36.30% for this year and 31.30% for next year. EPS is expected to grow by 26.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -9.10%.

Float and Shares Shorts:

At present, 144.60 million LW shares are outstanding with a float of 140.31 million shares on hand for trading. On Jul 14, 2022, short shares totaled 3.12 million, which was 2.16% higher than short shares on Jun 14, 2022. In addition to Mr. Thomas P. Werner as the firm’s Pres, CEO & Director, Mr. Eryk J. Spytek serves as its Sr. VP, Chief Compliance Officer & Gen. Counsel.

Institutional Ownership:

Through their ownership of 89.27% of LW’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 51.44% of LW, in contrast to 35.30% held by mutual funds. Shares owned by individuals account for 0.89%. As the largest shareholder in LW with 10.73% of the stake, The Vanguard Group, Inc. holds 15,504,673 shares worth 15,504,673. A second-largest stockholder of LW, APG Asset Management NV, holds 10,082,260 shares, controlling over 6.98% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in LW, holding 7,007,440 shares or 4.85% stake. With a 6.19% stake in LW, the Stichting Pensioenfonds ABP is the largest stakeholder. A total of 8,935,399 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.95% of LW stock, is the second-largest Mutual Fund holder. It holds 4,260,316 shares valued at 304.44 million. Vanguard 500 Index Fund holds 2.21% of the stake in LW, owning 3,198,485 shares worth 228.56 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LW since 8 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With LW analysts setting a high price target of $98.00 and a low target of $72.00, the average target price over the next 12 months is $85.00. Based on these targets, LW could surge 21.54% to reach the target high and fall by -10.7% to reach the target low. Reaching the average price target will result in a growth of 5.42% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. LW will report FY 2023 earnings on 07/26/2023. Analysts have provided yearly estimates in a range of $2.86 being high and $2.76 being low. For LW, this leads to a yearly average estimate of $2.81. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Lamb Weston Holdings Inc. surprised analysts by $0.14 when it reported $0.65 EPS against a consensus estimate of $0.51. The surprise factor in the prior quarter was $0.29. Based on analyst estimates, the high estimate for the next quarter is $0.56 and the low estimate is $0.44. The average estimate for the next quarter is thus $0.49.

Summary of Insider Activity:

Insiders traded LW stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 13 while that of sell transactions has risen to 7 over the past year. The total number of shares bought during that period was 49,438 while 20,018 shares were sold.

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