Lamb Weston Posts Weak Q2 Results, Joins Micron, Lennar And Other Big Stocks Moving Lower In Thursday's Pre-Market Session
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 19 2024
0mins
Should l Buy LW?
Source: Benzinga
Market Performance: U.S. stock futures rose this morning, with the Dow gaining over 100 points, while several companies, including Lamb Weston Holdings, experienced significant declines in pre-market trading due to disappointing earnings reports and lowered forecasts.
Stock Movements: Lamb Weston shares fell 18.6%, Abacus Life dropped 20.5%, and Micron Technology saw a 15.6% decline despite better-than-expected earnings; other companies like Lennar Corporation and Quantum Computing also reported losses in pre-market trading.
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Analyst Views on LW
Wall Street analysts forecast LW stock price to rise
9 Analyst Rating
3 Buy
6 Hold
0 Sell
Moderate Buy
Current: 45.750
Low
48.00
Averages
54.44
High
65.00
Current: 45.750
Low
48.00
Averages
54.44
High
65.00
About LW
Lamb Weston Holdings, Inc. is a global producer, distributor, and marketer of value-added frozen potato products. The Company is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers around the globe. The Company’s segments include North America and International. The Company’s frozen potato products are sold in North America and international markets generally to North American-based restaurant chains and international customers, comprised of global and regional quick service and full-service restaurant chains, foodservice distributors, and retailers. Its product portfolio includes frozen potatoes and appetizers sold under the Lamb Weston brand, as well as many customer labels. The Company’s product categories include classic fries, extra crispy fries, sweet potatoes, and other products. Its recipes include appetizers, desserts, dips, sauces and seasonings, entree, salad, side dishes, and topped and loaded.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Impact on Indices: This announcement reversed a 100-point decline in the S&P 500, contributing to a recovery in most major stock indexes.
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- Activist Investor Strategy: Activist investors are targeting companies with strong brands but weak stock performance, advocating for cost cuts and portfolio pruning to enhance shareholder value and improve financial performance.
- Market Reaction: The involvement of these investors often triggers market attention towards the affected companies, potentially leading to short-term stock volatility that reflects differing investor perceptions of the company's future potential.
- Calls for Corporate Restructuring: The goals of activist investors include pushing companies to consider breakups or restructuring to better focus on core operations, thereby increasing operational efficiency and market competitiveness.
- Long-Term Impact: While there may be short-term uncertainties, the implementation of these strategies is expected to create higher shareholder returns in the long run, fostering sustainable growth.
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- Investor Pressure: There is increasing pressure from investors in the packaged-food and restaurant sectors due to slow sales growth.
- Shifting Consumer Habits: Changing consumer preferences are prompting activists to seek ways to unlock value in these industries.
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- Shareholder Value Enhancement: Starboard Value LP believes that Lamb Weston has taken important steps forward, indicating that the company's potential in the market is being recognized and is expected to significantly enhance shareholder value.
- Earnings Power Expansion: Starboard highlights a clear opportunity for Lamb Weston to structurally increase its earnings power by expanding margins, emphasizing the potential for future growth within the company.
- Cost Savings Initiatives: Starboard urges Lamb Weston to double the previously announced cost savings initiatives, with a particular focus on reducing selling, general, and administrative expenses to improve overall operational efficiency.
- International Asset Review: Starboard encourages a strategic review of Lamb Weston’s international portfolio, including the potential divestiture of select APAC assets, to optimize resource allocation and enhance company value.
See More
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- Market Reaction: Three stocks set to join the S&P 500 experienced a rally on Monday despite a broader market slump.
- Oil Prices Surge: The rally occurred amid rising oil prices, which surpassed $100 a barrel due to the ongoing Iran war.
See More
