LAMB WESTON HOLDINGS INC (LW) Stock Fundamental Analysis
NYSE:LW - New York Stock Exchange, Inc. - US5132721045 - Common Stock - Currency: USD
Overall LW gets a fundamental rating of 4 out of 10. We evaluated LW against 90 industry peers in the Food Products industry. LW has an excellent profitability rating, but there are concerns on its financial health. LW has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year LW was profitable.
In the past year LW had a positive cash flow from operations.
Each year in the past 5 years LW has been profitable.
In the past 5 years LW always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 4.94%, LW is doing good in the industry, outperforming 65.56% of the companies in the same industry.
With an excellent Return On Equity value of 22.47%, LW belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
The Return On Invested Capital of LW (9.17%) is better than 81.11% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LW is above the industry average of 8.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 22.47% | ||
| ROIC | 9.17% |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
1.3 Margins
LW has a Profit Margin of 5.75%. This is in the better half of the industry: LW outperforms 76.67% of its industry peers.
In the last couple of years the Profit Margin of LW has declined.
LW's Operating Margin of 12.35% is fine compared to the rest of the industry. LW outperforms 80.00% of its industry peers.
LW's Operating Margin has been stable in the last couple of years.
LW has a Gross Margin (22.61%) which is comparable to the rest of the industry.
LW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.35% | ||
| PM (TTM) | 5.75% | ||
| GM | 22.61% |
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
2. Health
2.1 Basic Checks
LW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, LW has less shares outstanding
The number of shares outstanding for LW has been reduced compared to 5 years ago.
Compared to 1 year ago, LW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.58 indicates that LW is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.58, LW is in line with its industry, outperforming 54.44% of the companies in the same industry.
LW has a debt to FCF ratio of 77.32. This is a negative value and a sign of low solvency as LW would need 77.32 years to pay back of all of its debts.
The Debt to FCF ratio of LW (77.32) is comparable to the rest of the industry.
A Debt/Equity ratio of 2.55 is on the high side and indicates that LW has dependencies on debt financing.
With a Debt to Equity ratio value of 2.55, LW is not doing good in the industry: 88.89% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Altman-Z | 2.58 |
ROIC/WACC1.25
WACC7.35%
2.3 Liquidity
A Current Ratio of 1.35 indicates that LW should not have too much problems paying its short term obligations.
The Current ratio of LW (1.35) is comparable to the rest of the industry.
LW has a Quick Ratio of 1.35. This is a bad value and indicates that LW is not financially healthy enough and could expect problems in meeting its short term obligations.
LW's Quick ratio of 0.58 is on the low side compared to the rest of the industry. LW is outperformed by 68.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The earnings per share for LW have decreased strongly by -40.55% in the last year.
The Earnings Per Share has been growing by 9.46% on average over the past years. This is quite good.
The Revenue has decreased by -2.49% in the past year.
The Revenue has been growing by 11.48% on average over the past years. This is quite good.
EPS 1Y (TTM)-40.55%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-8.33%
Revenue 1Y (TTM)-2.49%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%4.27%
3.2 Future
LW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.03% yearly.
LW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.97% yearly.
EPS Next Y-36.38%
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
EPS Next 5Y7.03%
Revenue Next Year-2.96%
Revenue Next 2Y-0.91%
Revenue Next 3Y0.47%
Revenue Next 5Y3.97%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 15.60 indicates a correct valuation of LW.
65.56% of the companies in the same industry are more expensive than LW, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.03. LW is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 14.15, LW is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LW indicates a somewhat cheap valuation: LW is cheaper than 72.22% of the companies listed in the same industry.
LW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.6 | ||
| Fwd PE | 14.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LW is valued a bit cheaper than the industry average as 62.22% of the companies are valued more expensively.
LW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 131.15 | ||
| EV/EBITDA | 9.21 |
4.3 Compensation for Growth
The decent profitability rating of LW may justify a higher PE ratio.
LW's earnings are expected to decrease with -7.78% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.65
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.86%, LW has a reasonable but not impressive dividend return.
LW's Dividend Yield is a higher than the industry average which is at 4.58.
Compared to an average S&P500 Dividend Yield of 2.36, LW pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.86% |
5.2 History
On average, the dividend of LW grows each year by 9.19%, which is quite nice.
LW has been paying a dividend for over 5 years, so it has already some track record.
As LW did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)9.19%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
56.32% of the earnings are spent on dividend by LW. This is a bit on the high side, but may be sustainable.
The dividend of LW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP56.32%
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
51.02
-0.39 (-0.76%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners100.67%
Inst Owner Change-4.98%
Ins Owners1.73%
Ins Owner Change0.39%
Market Cap7.20B
Analysts75
Price Target66.21 (29.77%)
Short Float %3.79%
Short Ratio2.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.86% |
Yearly Dividend1.2
Dividend Growth(5Y)9.19%
DP56.32%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.9%
Min EPS beat(2)-36.69%
Max EPS beat(2)22.88%
EPS beat(4)1
Avg EPS beat(4)-13.74%
Min EPS beat(4)-39.85%
Max EPS beat(4)22.88%
EPS beat(8)3
Avg EPS beat(8)-1.96%
EPS beat(12)7
Avg EPS beat(12)13.62%
EPS beat(16)10
Avg EPS beat(16)14.21%
Revenue beat(2)0
Avg Revenue beat(2)-4.04%
Min Revenue beat(2)-7.14%
Max Revenue beat(2)-0.94%
Revenue beat(4)1
Avg Revenue beat(4)-3.23%
Min Revenue beat(4)-8.1%
Max Revenue beat(4)3.25%
Revenue beat(8)1
Avg Revenue beat(8)-3.63%
Revenue beat(12)4
Avg Revenue beat(12)-1.24%
Revenue beat(16)5
Avg Revenue beat(16)-1.24%
PT rev (1m)0.28%
PT rev (3m)-3.78%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.74%
EPS NY rev (1m)0%
EPS NY rev (3m)1.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.27%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.6 | ||
| Fwd PE | 14.15 | ||
| P/S | 1.13 | ||
| P/FCF | 131.15 | ||
| P/OCF | 8.98 | ||
| P/B | 4.41 | ||
| P/tB | 14.2 | ||
| EV/EBITDA | 9.21 |
EPS(TTM)3.27
EY6.41%
EPS(NY)3.61
Fwd EY7.07%
FCF(TTM)0.39
FCFY0.76%
OCF(TTM)5.68
OCFY11.14%
SpS45.26
BVpS11.58
TBVpS3.59
PEG (NY)N/A
PEG (5Y)1.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.94% | ||
| ROE | 22.47% | ||
| ROCE | 13.6% | ||
| ROIC | 9.17% | ||
| ROICexc | 9.27% | ||
| ROICexgc | 11.33% | ||
| OM | 12.35% | ||
| PM (TTM) | 5.75% | ||
| GM | 22.61% | ||
| FCFM | 0.86% |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
ROICexc(3y)12.37%
ROICexc(5y)12.84%
ROICexgc(3y)15.2%
ROICexgc(5y)15.33%
ROCE(3y)16.24%
ROCE(5y)15.46%
ROICexcg growth 3Y4.73%
ROICexcg growth 5Y-5.56%
ROICexc growth 3Y2.18%
ROICexc growth 5Y-7.67%
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
F-Score5
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Debt/EBITDA | 3.5 | ||
| Cap/Depr | 186.78% | ||
| Cap/Sales | 11.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.45% | ||
| Profit Quality | 14.96% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 2.58 |
F-Score5
WACC7.35%
ROIC/WACC1.25
Cap/Depr(3y)271.04%
Cap/Depr(5y)202.57%
Cap/Sales(3y)12.19%
Cap/Sales(5y)9.3%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-40.55%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-8.33%
EPS Next Y-36.38%
EPS Next 2Y-15.58%
EPS Next 3Y-7.78%
EPS Next 5Y7.03%
Revenue 1Y (TTM)-2.49%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%4.27%
Revenue Next Year-2.96%
Revenue Next 2Y-0.91%
Revenue Next 3Y0.47%
Revenue Next 5Y3.97%
EBIT growth 1Y-27.06%
EBIT growth 3Y31.59%
EBIT growth 5Y10.06%
EBIT Next Year2.35%
EBIT Next 3Y4.26%
EBIT Next 5Y4.9%
FCF growth 1Y1860.71%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y38.47%
OCF growth 3Y13%
OCF growth 5Y3.23%