Liberty One Reduces Stake in Lamb Weston, Indicating Waning Confidence
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy LW?
Source: Fool
Lamb Weston Holdings Inc shares fell 5.50% as it crossed below the 5-day SMA amid concerns over investor confidence.
Liberty One Investment Management reduced its stake in Lamb Weston by 544,473 shares, valued at approximately $32.04 million, reflecting a cautious outlook on the company's future performance. Following this sale, Lamb Weston now represents only 2.23% of Liberty One's portfolio, down from 3.1% in the previous quarter. The company has faced declining sales over the last two years, and its shares are down 12.4% over the past year, significantly underperforming the S&P 500 by 25 percentage points.
The reduction in stake by Liberty One highlights the challenges Lamb Weston faces in maintaining its competitive edge, especially with a net debt of $3.8 billion against a market cap of $6.9 billion, which may deter aggressive growth investors.
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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: 48.860
Low
48.00
Averages
54.44
High
65.00
Current: 48.860
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.
Food Stocks Decline Following General Mills' Sales Forecast Reduction
- Stock Performance: General Mills' stock fell on Tuesday following a revised sales outlook.
- Consumer Demand: The company attributed the lowered outlook to weaker-than-expected consumer demand for its products.
- Brand Recognition: General Mills is known for popular brands such as Cheerios, Pillsbury, and Betty Crocker.
- Market Impact: The decline in stock reflects broader concerns about consumer spending trends affecting food companies.
See More
Liberty One Reduces Lamb Weston Stake by 544,473 Shares
- Share Reduction Details: Liberty One sold 544,473 shares of Lamb Weston in Q4 2025, with an estimated transaction value of approximately $32.04 million, indicating a strategic shift in the fund's liquidity management approach.
- Impact on AUM: This sale reduced Lamb Weston’s representation in the fund to 2.23% from 3.1% in the previous quarter, reflecting a diminishing confidence in the stock's performance within the fund's portfolio.
- Market Performance Analysis: As of February 13, 2026, Lamb Weston shares were priced at $49.82, down 12.4% over the past year, significantly underperforming the S&P 500 by 25 percentage points, highlighting market concerns regarding its growth prospects.
- Financial Overview: While Lamb Weston has returned over $2 billion to shareholders in the past decade, its net debt of $3.8 billion against a market cap of $6.9 billion indicates financial leverage pressure that may limit future growth and shareholder returns.
See More
Liberty One Reduces Stake in Lamb Weston by 544,473 Shares
- Share Reduction Details: According to an SEC filing dated February 13, 2026, Liberty One Investment Management reduced its stake in Lamb Weston by 544,473 shares during Q4 2025, with an estimated transaction value of approximately $32.04 million, indicating a waning confidence in the company.
- Ownership Proportion Shift: Following this sale, Lamb Weston now represents only 2.23% of Liberty One's portfolio, down from 3.1% in the previous quarter, reflecting a cautious outlook on its future performance.
- Company Financial Overview: As of February 13, 2026, Lamb Weston shares were priced at $49.82, down 12.4% over the past year, and with declining sales over the last two years, the company faces challenges in maintaining its competitive edge in the market.
- Investor Considerations: Despite Liberty One's reduction, Lamb Weston’s reasonable valuation (EV-to-EBITDA ratio of 9 and P/E ratio of 11) may attract value investors; however, its $3.8 billion net debt against a $6.9 billion market cap limits growth potential, making it a less appealing option for aggressive growth investors.
See More
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- Upstart Options Volume: Upstart Holdings Inc recorded options trading volume of 14,721 contracts, equating to approximately 1.5 million shares, which represents about 41.2% of its average daily trading volume of 3.6 million shares over the past month, indicating strong market interest in its future performance.
- High Volume Contracts: Notably, the $45 strike call option expiring on March 20, 2026, saw 841 contracts traded today, representing around 84,100 underlying shares, reflecting bullish sentiment among investors at this price level.
- Lamb Weston Options Activity: In parallel, Lamb Weston Holdings Inc experienced options trading volume of 12,076 contracts, equivalent to approximately 1.2 million shares, or about 40.6% of its average daily trading volume of 3.0 million shares over the past month, showcasing ongoing market interest in its stock.
- Key Contract Trading: For the $47.50 strike call option expiring on February 20, 2026, 4,191 contracts have traded today, representing approximately 419,100 underlying shares, indicating positive expectations from investors regarding Lamb Weston’s future performance.
See More
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- Performance Warning: Lamb Weston faced a significant setback in fiscal 2024 due to a failed ERP implementation in North America, resulting in an estimated $135 million sales loss and a $330 million cut in full-year revenue guidance, highlighting severe execution issues that damaged customer trust.
- Capital Expenditure Pressure: The company committed nearly $2 billion in capital expenditures between 2020 and 2024 for capacity expansion, but with demand normalizing, excess capacity has led to fragile pricing discipline, further compressing profit margins amid intensified competition.
- Cash Flow Rebuilding Challenges: Under a reasonable EBITDA scenario, Lamb Weston could rebuild free cash flow to approximately $700-$800 million annually; however, under conservative estimates, cash flow may fall to $500-$600 million, indicating vulnerabilities in its financial health.
- Declining Return on Investment: The company's return on invested capital (ROIC) dropped from 15.9% in fiscal 2023 to 11.1% in fiscal 2025, reflecting a failure to achieve expected profitability during its expansion phase, with future returns hinging on improved execution and capital allocation discipline.
See More
Lamb Weston Grants Inducement Awards to New Executive Chair
- Award Grant: On February 6, 2026, Lamb Weston Holdings granted 317,647 restricted stock units and options covering 1,117,346 shares to new Executive Chair Jan Craps as a significant inducement for his hiring, highlighting the company's commitment to attracting top executive talent.
- Personal Investment Match: The award includes 300,000 restricted stock units matched one-for-one with Craps' personal investment in Lamb Weston shares, reflecting the company's emphasis on aligning executive and shareholder interests to enhance management accountability.
- Option Details: The granted options consist of 750,000 shares with an exercise price of $50.12, among others, providing a potential incentive mechanism for future shareholder value creation, with options set to expire in 2029.
- Compliance Statement: The awards were granted in reliance on the NYSE's employment inducement exemption under Rule 303A.08, ensuring the company's transparency and compliance responsibilities, thereby enhancing investor confidence.
See More
Food Stocks Decline Following General Mills' Sales Forecast Reduction
- Stock Performance: General Mills' stock fell on Tuesday following a revised sales outlook.
- Consumer Demand: The company attributed the lowered outlook to weaker-than-expected consumer demand for its products.
- Brand Recognition: General Mills is known for popular brands such as Cheerios, Pillsbury, and Betty Crocker.
- Market Impact: The decline in stock reflects broader concerns about consumer spending trends affecting food companies.
See More
Liberty One Reduces Lamb Weston Stake by 544,473 Shares
- Share Reduction Details: Liberty One sold 544,473 shares of Lamb Weston in Q4 2025, with an estimated transaction value of approximately $32.04 million, indicating a strategic shift in the fund's liquidity management approach.
- Impact on AUM: This sale reduced Lamb Weston’s representation in the fund to 2.23% from 3.1% in the previous quarter, reflecting a diminishing confidence in the stock's performance within the fund's portfolio.
- Market Performance Analysis: As of February 13, 2026, Lamb Weston shares were priced at $49.82, down 12.4% over the past year, significantly underperforming the S&P 500 by 25 percentage points, highlighting market concerns regarding its growth prospects.
- Financial Overview: While Lamb Weston has returned over $2 billion to shareholders in the past decade, its net debt of $3.8 billion against a market cap of $6.9 billion indicates financial leverage pressure that may limit future growth and shareholder returns.
See More
Liberty One Reduces Stake in Lamb Weston by 544,473 Shares
- Share Reduction Details: According to an SEC filing dated February 13, 2026, Liberty One Investment Management reduced its stake in Lamb Weston by 544,473 shares during Q4 2025, with an estimated transaction value of approximately $32.04 million, indicating a waning confidence in the company.
- Ownership Proportion Shift: Following this sale, Lamb Weston now represents only 2.23% of Liberty One's portfolio, down from 3.1% in the previous quarter, reflecting a cautious outlook on its future performance.
- Company Financial Overview: As of February 13, 2026, Lamb Weston shares were priced at $49.82, down 12.4% over the past year, and with declining sales over the last two years, the company faces challenges in maintaining its competitive edge in the market.
- Investor Considerations: Despite Liberty One's reduction, Lamb Weston’s reasonable valuation (EV-to-EBITDA ratio of 9 and P/E ratio of 11) may attract value investors; however, its $3.8 billion net debt against a $6.9 billion market cap limits growth potential, making it a less appealing option for aggressive growth investors.
See More
Upstart and Lamb Weston See Active Options Trading
- Upstart Options Volume: Upstart Holdings Inc recorded options trading volume of 14,721 contracts, equating to approximately 1.5 million shares, which represents about 41.2% of its average daily trading volume of 3.6 million shares over the past month, indicating strong market interest in its future performance.
- High Volume Contracts: Notably, the $45 strike call option expiring on March 20, 2026, saw 841 contracts traded today, representing around 84,100 underlying shares, reflecting bullish sentiment among investors at this price level.
- Lamb Weston Options Activity: In parallel, Lamb Weston Holdings Inc experienced options trading volume of 12,076 contracts, equivalent to approximately 1.2 million shares, or about 40.6% of its average daily trading volume of 3.0 million shares over the past month, showcasing ongoing market interest in its stock.
- Key Contract Trading: For the $47.50 strike call option expiring on February 20, 2026, 4,191 contracts have traded today, representing approximately 419,100 underlying shares, indicating positive expectations from investors regarding Lamb Weston’s future performance.
See More
Lamb Weston Faces Challenges in Rebuilding Credibility
- Performance Warning: Lamb Weston faced a significant setback in fiscal 2024 due to a failed ERP implementation in North America, resulting in an estimated $135 million sales loss and a $330 million cut in full-year revenue guidance, highlighting severe execution issues that damaged customer trust.
- Capital Expenditure Pressure: The company committed nearly $2 billion in capital expenditures between 2020 and 2024 for capacity expansion, but with demand normalizing, excess capacity has led to fragile pricing discipline, further compressing profit margins amid intensified competition.
- Cash Flow Rebuilding Challenges: Under a reasonable EBITDA scenario, Lamb Weston could rebuild free cash flow to approximately $700-$800 million annually; however, under conservative estimates, cash flow may fall to $500-$600 million, indicating vulnerabilities in its financial health.
- Declining Return on Investment: The company's return on invested capital (ROIC) dropped from 15.9% in fiscal 2023 to 11.1% in fiscal 2025, reflecting a failure to achieve expected profitability during its expansion phase, with future returns hinging on improved execution and capital allocation discipline.
See More
Lamb Weston Grants Inducement Awards to New Executive Chair
- Award Grant: On February 6, 2026, Lamb Weston Holdings granted 317,647 restricted stock units and options covering 1,117,346 shares to new Executive Chair Jan Craps as a significant inducement for his hiring, highlighting the company's commitment to attracting top executive talent.
- Personal Investment Match: The award includes 300,000 restricted stock units matched one-for-one with Craps' personal investment in Lamb Weston shares, reflecting the company's emphasis on aligning executive and shareholder interests to enhance management accountability.
- Option Details: The granted options consist of 750,000 shares with an exercise price of $50.12, among others, providing a potential incentive mechanism for future shareholder value creation, with options set to expire in 2029.
- Compliance Statement: The awards were granted in reliance on the NYSE's employment inducement exemption under Rule 303A.08, ensuring the company's transparency and compliance responsibilities, thereby enhancing investor confidence.
See More
