Bernstein on Lamb Weston (LW): 'FY25 Results Were Worse Than Even We Feared'

Bernstein SocGen Group analyst Alexia Howard reiterated a Market Perform rating and $85.00 price target on Lamb Weston (NYSE: LW).

The analyst said: "Price action for our coverage companies can at times detach from their fundamentals. In the case for Lamb Weston, recent rumors about being an acquisition target and activist calls for changes have led to a meaningful 2-week outperformance versus the rest of the U.S. Food universe. Today’s weak earnings results will likely bring its stock back down to earth. Going into the print we had concerns about LW’s gross margin (Bernstein 22.4% vs. consensus 24.5%) but today’s results were even worse than feared. Sales missed consensus by -4%, adjusted gross margin was 21.5%, EBITDA came in -14% below consensus, and Adj EPS was $0.66, below consensus of $1.02. The outlook was also reduced sharply with EPS guidance cut -26%. Management expects the operating environment to remain challenged through FY2025 and into FY2026 as incremental capacity and softness in potato demand persists. The company is taking steps to steady the business, including a new CEO, but changes in company financials will take time to bear fruit with near term financials likely remaining under pressure."

For an analyst ratings summary and ratings history on Lamb Weston click here. For more ratings news on Lamb Weston click here.

Shares of Lamb Weston closed at $62.50 yesterday.

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