Lamb Weston (LW) PT Raised to $80 at BofA Securities

BofA Securities analyst Peter Galbo raised the price target on Lamb Weston (NYSE: LW) to $80.00 (from $68.00) while maintaining a Neutral rating.

The analyst comments "On Friday, activist investor JANA Partners, in conjunction with Continental Grain (Conti), each filed form 13-D’s disclosing stakes of 5% and less than 1%, respectively in Lamb Weston (LW). JANA is also working with a number of individuals including former LW Executive Chairman Tim McLevish and current Simply Goods Food CEO Joe Scalzo, among others. JANA/Conti’s filings state intentions to have discussions with LW’s board and management regarding 1) LW’s “litany of self-inflicted missteps” including customer demand planning and retention, ERP system implementation, capital spending/capacity expansion projects, 2) share repurchase strategy & execution, 3) mgmt. compensation practices including a focus on returns on capital vs growth at any cost and 4) initiation of review of strategic alternatives, including a potential sale of the business. Our take, given LW’s poor stock performance YTD we are unsurprised by the announcement, though we believe Conti’s involvement with JANA adds weight given the formers expertise in the agricultural industry. Raise PO to $80 (prior $68), now based on 17x CY25 EPS (prior 14x) given improved quick-service restaurant traffic and outlook."

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