LW

Lamb Weston Holdings Inc

Consumer


Presented:10/14/2021
Price:$57.96
Cap:$8.47B
Current Price:$71.31
Cap:$10.17B

Presented

Date10/14/2021
Price$57.96
Market Cap$8.47B
Ent Value$11.60B
P/E Ratio33.01x
Book Value$2.93
Div Yield1.61%
Shares O/S146.07M
Ave Daily Vol1,395,750
Short Int1.86%

Current

Price$71.31
Market Cap$10.17B
Lamb Weston Holdings, Inc. engages in the production, distribution, and marketing of value-added frozen potato products. It operates through the following business segments: Global, Foodservice, Retail, and Other. The Global segment includes branded and private label frozen potato products sold in North America and international markets. The Foodservice segment comprises branded and private label frozen potato products sold throughout the United States and Canada. The Retail segment consists consumer facing retail branded and private label frozen potato products sold primarily to grocery, mass merchants, club, and specialty retailers. The Other segment compose of vegetable and dairy businesses. The company was founded on July 5, 2016 and is headquartered in Eagle, ID.

Publicly traded companies mentioned herein: Conagra Brands Inc (CAG), Lamb Weston Holdings Inc (LW)

Highlights

The presenter is long shares of Lamb Weston Holdings Inc (LW), a leading producer and supplier of frozen potato products that spun out of CAG in 2016. LW is partially vertically integrated (it owns some of its own potato farms) but sources most of its raw potatoes from farmers with whom it has long-term relationships. The company then cuts, peels, and fries the potatoes before storing them in large freezers and eventually shipping the products to its customer base. It owns the processing facilities and R&D/technology, which allows LW to make all different kinds of fries. Shares trade at $57 currently, down from ~$80 six months ago, but the presenter expects LW to recover from short-term margin contraction, leading to EPS beats in FY2023 and FY2024. Using his base case FY2024 EPS estimate of $4.70 and the multiple rerating back to 25x, he has a price target of $118 per share. 

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