Lamb Weston (LW) PT Lowered to $85 at Jefferies Ahead of Earnings

Jefferies analyst Rob Dickerson lowered the price target on Lamb Weston (NYSE: LW) to $85.00 (from $90.00) ahead of results tomorrow due to the poor potato harvest, an ongoing tight labor situation at the company, and slightly higher transportation costs.

The analyst reiterated a Buy rating, stating "Headed into Lamb’s Q1 results, focus rests on the poor potato harvest this year (and what that means for the timing of incremental costs vs. additional pricing needs), an ongoing tight labor situation at the company, and slightly higher transportation costs relative to just three months ago. While there could be some offsets to an increasingly inflationary cost backdrop, the lower crop yield (likely down 8-10% according to our industry sources) and poor potato quality should impact Lamb adversely as we move through Q1, not simply b/c Lamb may need to purchase potatoes on spot to cover end-market demand, but also given slower line speeds and higher costs to process lower quality product."

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