LAMB WESTON HOLDINGS INC (LW) Stock Fundamental Analysis
USA - NYSE:LW - US5132721045 - Common Stock
62.9 USD
+0.76 (+1.22%)
63 USD
+0.1 (+0.16%)
We assign a fundamental rating of 4 out of 10 to LW. LW was compared to 89 industry peers in the Food Products industry. While LW is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, LW is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
LW had positive earnings in the past year.
In the past year LW had a positive cash flow from operations.
LW had positive earnings in each of the past 5 years.
LW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of LW (4.83%) is better than 69.66% of its industry peers.
The Return On Equity of LW (20.56%) is better than 89.89% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.63%, LW belongs to the top of the industry, outperforming 80.90% of the companies in the same industry.
LW had an Average Return On Invested Capital over the past 3 years of 11.49%. This is significantly below the industry average of 27.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.83% | ||
| ROE | 20.56% | ||
| ROIC | 9.63% |
ROA(3y)10.05%
ROA(5y)8.51%
ROE(3y)44.21%
ROE(5y)50.9%
ROIC(3y)11.49%
ROIC(5y)10.72%
1.3 Margins
LW's Profit Margin of 5.54% is fine compared to the rest of the industry. LW outperforms 73.03% of its industry peers.
LW's Profit Margin has declined in the last couple of years.
LW's Operating Margin of 12.88% is fine compared to the rest of the industry. LW outperforms 78.65% of its industry peers.
LW's Operating Margin has declined in the last couple of years.
LW has a Gross Margin of 22.85%. This is comparable to the rest of the industry: LW outperforms 53.93% of its industry peers.
In the last couple of years the Gross Margin of LW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.88% | ||
| PM (TTM) | 5.54% | ||
| GM | 22.85% |
OM growth 3Y5.39%
OM growth 5Y-2.73%
PM growth 3Y4.15%
PM growth 5Y-10.51%
GM growth 3Y4.02%
GM growth 5Y-0.65%
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
LW has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, LW has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.79 indicates that LW is not a great score, but indicates only limited risk for bankruptcy at the moment.
LW has a better Altman-Z score (2.79) than 62.92% of its industry peers.
The Debt to FCF ratio of LW is 21.02, which is on the high side as it means it would take LW, 21.02 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 21.02, LW perfoms like the industry average, outperforming 49.44% of the companies in the same industry.
LW has a Debt/Equity ratio of 2.33. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 2.33, LW is not doing good in the industry: 88.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 21.02 | ||
| Altman-Z | 2.79 |
ROIC/WACC1.33
WACC7.22%
2.3 Liquidity
A Current Ratio of 1.38 indicates that LW should not have too much problems paying its short term obligations.
The Current ratio of LW (1.38) is worse than 60.67% of its industry peers.
A Quick Ratio of 0.68 indicates that LW may have some problems paying its short term obligations.
LW's Quick ratio of 0.68 is on the low side compared to the rest of the industry. LW is outperformed by 66.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
LW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.99%.
The Earnings Per Share has been growing slightly by 6.09% on average over the past years.
Looking at the last year, LW shows a decrease in Revenue. The Revenue has decreased by -0.25% in the last year.
The Revenue has been growing by 11.21% on average over the past years. This is quite good.
EPS 1Y (TTM)-18.99%
EPS 3Y17.33%
EPS 5Y6.09%
EPS Q2Q%1.37%
Revenue 1Y (TTM)-0.25%
Revenue growth 3Y16.32%
Revenue growth 5Y11.21%
Sales Q2Q%0.31%
3.2 Future
The Earnings Per Share is expected to grow by 7.32% on average over the next years.
The Revenue is expected to grow by 3.29% on average over the next years.
EPS Next Y-11.04%
EPS Next 2Y0.88%
EPS Next 3Y5.1%
EPS Next 5Y7.32%
Revenue Next Year1.97%
Revenue Next 2Y1.4%
Revenue Next 3Y2.79%
Revenue Next 5Y3.29%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 18.66, which indicates a rather expensive current valuation of LW.
Compared to the rest of the industry, the Price/Earnings ratio of LW is on the same level as its industry peers.
LW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.86.
A Price/Forward Earnings ratio of 18.40 indicates a rather expensive valuation of LW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LW indicates a somewhat cheap valuation: LW is cheaper than 66.29% of the companies listed in the same industry.
LW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.66 | ||
| Fwd PE | 18.4 |
4.2 Price Multiples
LW's Enterprise Value to EBITDA is on the same level as the industry average.
LW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.61 | ||
| EV/EBITDA | 9.97 |
4.3 Compensation for Growth
LW has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.06
EPS Next 2Y0.88%
EPS Next 3Y5.1%
5. Dividend
5.1 Amount
LW has a Yearly Dividend Yield of 2.39%.
LW's Dividend Yield is a higher than the industry average which is at 5.01.
LW's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
5.2 History
On average, the dividend of LW grows each year by 11.99%, 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)11.99%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
57.92% of the earnings are spent on dividend by LW. This is a bit on the high side, but may be sustainable.
LW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP57.92%
EPS Next 2Y0.88%
EPS Next 3Y5.1%
62.9
+0.76 (+1.22%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners101.08%
Inst Owner Change-9.48%
Ins Owners2.27%
Ins Owner Change0.93%
Market Cap8.77B
Analysts75
Price Target66.24 (5.31%)
Short Float %3.39%
Short Ratio2.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
Yearly Dividend1.46
Dividend Growth(5Y)11.99%
DP57.92%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)28.1%
Min EPS beat(2)22.88%
Max EPS beat(2)33.32%
EPS beat(4)2
Avg EPS beat(4)4.55%
Min EPS beat(4)-36.69%
Max EPS beat(4)33.32%
EPS beat(8)3
Avg EPS beat(8)0.56%
EPS beat(12)7
Avg EPS beat(12)14.38%
EPS beat(16)10
Avg EPS beat(16)16.25%
Revenue beat(2)1
Avg Revenue beat(2)0.68%
Min Revenue beat(2)-0.94%
Max Revenue beat(2)2.31%
Revenue beat(4)2
Avg Revenue beat(4)-0.63%
Min Revenue beat(4)-7.14%
Max Revenue beat(4)3.25%
Revenue beat(8)2
Avg Revenue beat(8)-3.25%
Revenue beat(12)4
Avg Revenue beat(12)-1.4%
Revenue beat(16)5
Avg Revenue beat(16)-1.46%
PT rev (1m)0%
PT rev (3m)1.73%
EPS NQ rev (1m)-0.7%
EPS NQ rev (3m)-28.87%
EPS NY rev (1m)-0.38%
EPS NY rev (3m)-16.48%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.66 | ||
| Fwd PE | 18.4 | ||
| P/S | 1.36 | ||
| P/FCF | 44.61 | ||
| P/OCF | 10.09 | ||
| P/B | 5.04 | ||
| P/tB | 16.43 | ||
| EV/EBITDA | 9.97 |
EPS(TTM)3.37
EY5.36%
EPS(NY)3.42
Fwd EY5.44%
FCF(TTM)1.41
FCFY2.24%
OCF(TTM)6.23
OCFY9.91%
SpS46.3
BVpS12.47
TBVpS3.83
PEG (NY)N/A
PEG (5Y)3.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.83% | ||
| ROE | 20.56% | ||
| ROCE | 14.05% | ||
| ROIC | 9.63% | ||
| ROICexc | 9.74% | ||
| ROICexgc | 12.08% | ||
| OM | 12.88% | ||
| PM (TTM) | 5.54% | ||
| GM | 22.85% | ||
| FCFM | 3.05% |
ROA(3y)10.05%
ROA(5y)8.51%
ROE(3y)44.21%
ROE(5y)50.9%
ROIC(3y)11.49%
ROIC(5y)10.72%
ROICexc(3y)11.82%
ROICexc(5y)11.8%
ROICexgc(3y)14.91%
ROICexgc(5y)14.34%
ROCE(3y)16.55%
ROCE(5y)15.18%
ROICexcg growth 3Y-1.96%
ROICexcg growth 5Y-6.41%
ROICexc growth 3Y-4.75%
ROICexc growth 5Y-7.96%
OM growth 3Y5.39%
OM growth 5Y-2.73%
PM growth 3Y4.15%
PM growth 5Y-10.51%
GM growth 3Y4.02%
GM growth 5Y-0.65%
F-Score5
Asset Turnover0.87
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 21.02 | ||
| Debt/EBITDA | 3.27 | ||
| Cap/Depr | 164.86% | ||
| Cap/Sales | 10.41% | ||
| Interest Coverage | 3.94 | ||
| Cash Conversion | 70.11% | ||
| Profit Quality | 55.01% | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 2.79 |
F-Score5
WACC7.22%
ROIC/WACC1.33
Cap/Depr(3y)272.82%
Cap/Depr(5y)212.89%
Cap/Sales(3y)13.17%
Cap/Sales(5y)10.29%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-18.99%
EPS 3Y17.33%
EPS 5Y6.09%
EPS Q2Q%1.37%
EPS Next Y-11.04%
EPS Next 2Y0.88%
EPS Next 3Y5.1%
EPS Next 5Y7.32%
Revenue 1Y (TTM)-0.25%
Revenue growth 3Y16.32%
Revenue growth 5Y11.21%
Sales Q2Q%0.31%
Revenue Next Year1.97%
Revenue Next 2Y1.4%
Revenue Next 3Y2.79%
Revenue Next 5Y3.29%
EBIT growth 1Y-22.9%
EBIT growth 3Y22.59%
EBIT growth 5Y8.17%
EBIT Next Year48.88%
EBIT Next 3Y21.29%
EBIT Next 5Y14.66%
FCF growth 1Y201.5%
FCF growth 3Y20.72%
FCF growth 5Y-11.68%
OCF growth 1Y8.78%
OCF growth 3Y27.58%
OCF growth 5Y8.63%