LW News & Events

Stock futures have moved sharply lower ahead of the open as a dramatic surge in oil prices tied to the escalating conflict involving Iran ripples through financial markets. Crude prices jumped above $100 per barrel and briefly approached roughly $120, the highest levels since 2022, after attacks on energy infrastructure and disruptions to shipping routes heightened fears of a global supply shock. The possibility that tanker traffic through the Strait of Hormuz could remain disrupted has forced traders to rapidly price in a geopolitical risk premium across energy markets.Equity markets reacted negatively to the sudden energy shock and indices fell across Asia and Europe as investors weighed the inflationary implications of higher fuel costs and the risk that the conflict could drag on. Some markets experienced particularly severe declines, with Asian stocks sliding sharply and South Korea's Kospi briefly halting trading after a steep drop, highlighting the speed of the risk-off move.Energy prices feed directly into transportation, manufacturing, and consumer costs, meaning a sustained spike in crude could push inflation expectations higher again and complicate central bank policy. At the same time, economic data released late last week signaled some cooling in the labor market, raising fears of a stagflationary environment where growth slows while price pressures rise.In pre-market trading, S&P 500 futures fell 1.13%, Nasdaq futures fell 1.22% and Dow futures fell 1.26%.Check out this morning's top movers from around Wall Street, compiled by The Fly.HIGHER -Hims & Hersup 50% after entering into an agreement with Novo Nordiskthat will bring Ozempic injections and Wegovy pills and injections to the platform later this monthXenon Pharmaceuticalsup 48% after announcing its X-TOLE2 study of azetukalner in focal onset seizures met its primary endpointDianthusup 24% after reporting an early GO decision based on an interim responder analysis in the Phase 3 CAPTIVATE trial of claseprubart in Chronic Inflammatory Demyelinating Polyneuropathy, CIDPLive Nationup 5% after Bloombergthe company is close to settling a federal antitrust lawsuit in a deal that would avoid the sale of its Ticketmaster unitApplied Optoelectronicsup 3% after announcing it received its first volume order for its 1.6T data center transceivers from one of its long-term major hyperscale customers to boost its network bandwidth for AI workloadUP AFTER EARNINGS -Heritage Insuranceup 6%DOWN AFTER EARNINGS -Beta Technologiesdown 3%LOWER -Jefferies Financialdown 3% after Morgan Stanley downgraded the stock to Equal Weight with a price target of $49, down from $78Lamb Westondown 1% after Starboard Value built a stake in the company and has been pushing to company to accelerate improvements and cost cuttingStarbucksdown 1% after Wolfe Research downgraded shares to Peer Perform after assuming coverage of the name

Starboard Value, a stockholder of Lamb Weston, announced that it has delivered a letter to Michael Smith, the company's CEO, with a copy to the company's board of directors. The letter said, "We appreciate the time that you and the Lamb Weston team have spent with us over the past year. As we have discussed, we believe that Lamb Weston Holdings, Inc. is a high-quality business operating in a structurally attractive industry. We are encouraged by the meaningful progress made since the leadership transition, including improved pricing discipline, a clear volume inflection, and deliberate capacity curtailments that have begun to restore utilization toward normalized levels. We believe the opportunity extends beyond the initial recovery. The return of volume growth and more rational capacity behavior are important milestones, but stabilization alone will not be sufficient to unlock Lamb Weston's full earnings potential. In our view, the Company is well positioned to enter a new phase of value creation, one defined not only by normalization of industry conditions, but by a structural improvement in margins, capital allocation, and earnings power. Specifically, we believe you should expand the already announced cost reduction program and conduct a strategic review of certain international operations, particularly within Asia Pacific. The Company has announced a cost reduction program targeting at least $250 million in annualized run-rate savings by the end of FY2028. While this is a welcome first step, it is important to recognize that the vast majority of the announced savings are expected to come from cost of sales, with comparatively limited impact on selling, general, and administrative expenses and overhead. We believe the larger opportunity moving forward lies within SG&A. As you see in the chart below, since IPO, Lamb Weston's sales have roughly doubled, yet the Company has generated little to no operating leverage. Most of the Company's revenue growth since IPO has been price-driven, as opposed to volume-driven. Therefore, we would expect Lamb Weston to have realized significant operating leverage. You have not. It is time to catch up... Mike, we greatly appreciate the hard work so far and are thrilled to be able to buy a substantial position at this valuation. We believe a valuation of 6.7x EV/ NTM EBITDA5, proforma for a 25% EBITDA margin, is extremely attractive, especially for a high-quality business in a stable and capacity-constrained industry. While we are pleased with the progress to date, we believe there is much more to be accomplished and are excited to be able to get involved at this valuation. We look forward to working with you and the Board as you focus on accomplishing and surpassing this margin target. Lamb Weston remains a strong business with durable competitive advantages in a concentrated industry. We look forward to engaging constructively as the Company moves into this next phase of value creation and stand ready to support actions that strengthen Lamb Weston's performance and long-term shareholder value."

Catch up on the weekend's top five stories with this list compiled by The Fly: 1) KKR (KKR) is working on a sale of CoolIT Systems, hoping to fetch a price tag in excess of $3B, Oliver Barnes and Antoine Gara of The Financial Times reports, citing people familiar with the matter. This is a massive increase from the unit's $270M valuation when KKR bought a majority stake in 2023. 2) Dr. Vinay Prasad, who issued several controversial decisions, including having refused to accept Moderna's (MRNA) application for a new mRNA flu vaccine and refused an application for a Huntington's drug's review from UniQure (QURE), is leaving the agency at the end of April, reported The New York Times' Christina Jewett on Friday evening, citing a Health and Human Services spokesman. Publicly traded large-cap drugmakers include AstraZeneca (AZN), Bristol Myers (BMY), Eli Lilly (LLY), GSK (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY). Biotech stocks that could be impacted by the news include Sarepta (SRPT), Xencor (XNCR), PTC Therapeutics (PTCT), Biohaven (BHVN), Edgewise Therapeutics (EWTX), Design Therapeutics (DSGN), Ultragenyx (RARE), Avidity Biosciences (RNA), Dyne Therapeutics (DYN), Wave Life Sciences (WVE), MeiraGTx (MGTX), uniQure (QURE), Regenxbio (RGNX), Moderna (MRNA), Novavax (NVAX) and Lexeo Therapeutics (LXEO). 3) Plug Power (PLUG) plans to offer hydrogen electricity, as much as 250 megawatts, in an auction President Donald Trump is eager to make happen later this year, Will Wade and Naureen Malik of Bloomberg reports, citing chairman Andy Marsh. PJM Interconnection, which is facing power shortages due to surging consumption by data centers to power AI, has been urged by the Trump administration to hold an emergency auction to bolster supplies. 4) Prudential (PRU) disclosed yesterday that on March 6, the Prudential Gibraltar Financial Life Insurance Co., a subsidiary of Prudential Financial, issued a press release in Japan reporting instances of the unauthorized removal of information by certain employees of PGFL seconded to financial institutions in Japan. The investigation confirmed that 11 employees in total removed 379 instances of information at seven contracted agencies. The removed information pertained to operational matters such as sales performance at the assigned agencies. "After confirming the content of all cases with the agencies, no issues were identified that would raise concerns under the Unfair Competition Prevention Act, nor was there any inappropriate removal of contract information," Prudential Gibraltar Financial said. 5) Activist investor Starboard Value has built a stake in Lamb Weston (LW) and has been pushing to company to speed up improvements and cost cutting to boost stock performance, Lauren Thomas of The Wall Street Journal reports, citing people familiar with the matter. Starboard is now one of the largest shareholders in the company, the sources added.