LW Should I Buy
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Lamb Weston Holdings Inc (LW) is not a good buy for a beginner investor with a long-term strategy at this moment. Despite a recent selloff and some analysts suggesting the drop is overdone, the company's financial performance, negative catalysts, and lack of strong proprietary trading signals do not support a compelling entry point. The investor should wait for clearer signs of recovery or improved fundamentals.
The MACD is positive but contracting, indicating weakening momentum. RSI is neutral at 78.728, and moving averages are converging, showing no clear trend. The stock is trading near resistance levels (R1: 51.204), suggesting limited upside potential in the short term.
The company's North American volume performance was strong in fiscal Q2, and the new Executive Chair's stock-based compensation aligns his interests with shareholders.
The company faced a $135 million sales loss and a $330 million revenue guidance cut due to a failed ERP implementation. Analysts have downgraded the stock and lowered price targets significantly, citing international competition, margin pressures, and negative price/mix dynamics. The stock has a 40% chance of declining further in the next month.
In 2026/Q2, revenue increased by 1.07% YoY to $1.618 billion, but net income dropped by -272.02% YoY to $62.1 million. EPS also fell by -276% YoY to $0.44, and gross margin decreased by 9.2% YoY to 20.04%. These figures indicate significant profitability challenges.
Analysts have downgraded the stock and lowered price targets, with the latest targets ranging from $48 to $55. While some analysts believe the recent selloff is overdone, others cite ongoing challenges such as international competition and margin pressures as reasons for caution.
