A History of Outperforming Analyst Forecasts and Beating the Odds: Lamb Weston Holdings Inc. (LW)

Lamb Weston Holdings Inc. (NYSE: LW) stock fell -0.14% on Friday to $77.83 against a previous-day closing price of $77.94. With 2.07 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.34 million shares. During the session, the Packaged Foods company that operates in wider Consumer Defensive sector, reached to the highest price of $78.23 whereas the lowest price it dropped to was $76.50. The 52-week range on LW shows that it touched its highest point at $83.29 and its lowest point at $49.71 during that stretch. It currently has a 1-year price target of $85.86. With its current market cap of 11.34 billion, LW has annualized dividend of $0.98 while the current yield stands at 1.26%. 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 0.27%, but this was down by -4.61% over a month. Three-month performance surged to 12.47% while six-month performance rose 42.03%. The stock gained 27.55% in the past year, while it has gained 22.80% so far this year. A look at the trailing 12-month EPS for LW yields 1.38 with Next year EPS estimates of 3.78. For the next quarter, that number is 0.49. This implies an EPS growth rate of -36.30% for this year and 35.34% for next year. EPS is expected to grow by 26.05% 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 137.99 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 50.03% of LW, in contrast to 37.51% held by mutual funds. Shares owned by individuals account for 0.89%. As the largest shareholder in LW with 10.89% of the stake, The Vanguard Group, Inc. holds 15,650,348 shares worth 15,650,348. A second-largest stockholder of LW, APG Asset Management NV, holds 9,520,253 shares, controlling over 6.62% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in LW, holding 7,233,030 shares or 5.03% stake. With a 6.22% 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 2.97% of LW stock, is the second-largest Mutual Fund holder. It holds 4,271,110 shares valued at 339.68 million. Vanguard 500 Index Fund holds 2.24% of the stake in LW, owning 3,222,213 shares worth 256.26 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LW since 9 analysts follow the stock currently. There are 5 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 $85.86. Based on these targets, LW could surge 25.92% to reach the target high and fall by -7.49% to reach the target low. Reaching the average price target will result in a growth of 10.32% 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 $2.75 being low. For LW, this leads to a yearly average estimate of $2.80. 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 22 Buys and 15 Sells. In these transactions, 187,170 shares were bought while 45,845 shares were sold. The number of buy transactions has increased to 35 while that of sell transactions has risen to 21 over the past year. The total number of shares bought during that period was 236,608 while 65,251 shares were sold.

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