Lamb Weston: Stability Returns, But Performance Is Far From Impressive
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The Value InvestorInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryLamb Weston has stabilized after a sharp share price decline, but its 2026 outlook remains underwhelming with flat sales and declining EBITDA.Despite activist involvement and cost-cutting efforts, LW’s earnings power is stable at just above $3 per share, with little imminent margin improvement expected.Net debt remains high at nearly $3.9 billion, and leverage is elevated, limiting flexibility despite modest cash flow gains and reduced capital spending.Shares have rebounded 20% since spring, now trading at a 20x earnings multiple, but compelling upside requires a return to meaningful margin growth. JHVEPhoto/iStock Editorial via Getty Images In March I concluded that the situation around Lamb Weston (LW) was painful, after shares were cut in half in less than two years time due to declining margins and compressed earnings multiples. DealingThis article was written byThe Value Investor27.4K FollowersFollowThe Value Investor has a Master of Science with specialization in financial markets and a decade of experience tracking companies via catalytic company events. As the leader of the investing group Value In Corporate Events they provide members with opportunities to capitalize on IPOs, mergers & acquisitions, earnings reports and changes in corporate capital allocation. Coverage includes 10 major events a month with an eye towards finding the best opportunities. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.