LAMB WESTON HOLDINGS INC (LW) Stock Fundamental Analysis
NYSE:LW - New York Stock Exchange, Inc. - US5132721045 - Common Stock - Currency: USD
Taking everything into account, LW scores 4 out of 10 in our fundamental rating. LW was compared to 89 industry peers in the Food Products industry. LW has a medium profitability rating, but doesn't score so well on its financial health evaluation. LW is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year LW was profitable.
LW had a positive operating cash flow in the past year.
In the past 5 years LW has always been profitable.
Each year in the past 5 years LW had a positive operating cash flow.
1.2 Ratios
LW has a Return On Assets of 4.94%. This is in the better half of the industry: LW outperforms 65.17% of its industry peers.
With an excellent Return On Equity value of 22.47%, LW belongs to the best of the industry, outperforming 92.13% of the companies in the same industry.
LW has a better Return On Invested Capital (9.17%) than 79.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LW is above the industry average of 9.00%.
| 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's Profit Margin of 5.75% is fine compared to the rest of the industry. LW outperforms 75.28% of its industry peers.
In the last couple of years the Profit Margin of LW has declined.
The Operating Margin of LW (12.35%) is better than 79.78% of its industry peers.
In the last couple of years the Operating Margin of LW has remained more or less at the same level.
LW's Gross Margin of 22.61% is in line compared 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 | 12.35% | ||
| 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.
The number of shares outstanding for LW has been reduced compared to 1 year ago.
The number of shares outstanding for LW has been reduced compared to 5 years ago.
LW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.60 indicates that LW is not a great score, but indicates only limited risk for bankruptcy at the moment.
LW has a Altman-Z score (2.60) which is comparable to the rest of the industry.
The Debt to FCF ratio of LW is 77.32, which is on the high side as it means it would take LW, 77.32 years of fcf income to pay off all of its debts.
LW's Debt to FCF ratio of 77.32 is in line compared to the rest of the industry. LW outperforms 41.57% of its industry peers.
A Debt/Equity ratio of 2.55 is on the high side and indicates that LW has dependencies on debt financing.
LW has a Debt to Equity ratio of 2.55. This is amonst the worse of the industry: LW underperforms 87.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Altman-Z | 2.6 |
ROIC/WACC1.29
WACC7.12%
2.3 Liquidity
A Current Ratio of 1.35 indicates that LW should not have too much problems paying its short term obligations.
LW has a Current ratio of 1.35. This is comparable to the rest of the industry: LW outperforms 46.07% of its industry peers.
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 has a worse Quick ratio (0.58) than 70.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
LW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -40.55%.
The Earnings Per Share has been growing by 9.46% on average over the past years. This is quite good.
Looking at the last year, LW shows a decrease in Revenue. The Revenue has decreased by -2.49% in the last year.
Measured over the past years, LW shows a quite strong growth in Revenue. The Revenue has been growing by 11.48% on average per year.
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.
The Revenue is expected to grow by 3.97% on average over the next years.
EPS Next Y-36.38%
EPS Next 2Y-15.47%
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
With a Price/Earnings ratio of 15.94, LW is valued correctly.
65.17% of the companies in the same industry are more expensive than LW, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of LW to the average of the S&P500 Index (27.85), we can say LW is valued slightly cheaper.
The Price/Forward Earnings ratio is 14.41, which indicates a correct valuation of LW.
Based on the Price/Forward Earnings ratio, LW is valued a bit cheaper than 75.28% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.77, LW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.94 | ||
| Fwd PE | 14.41 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LW indicates a somewhat cheap valuation: LW is cheaper than 61.80% of the companies listed in the same industry.
LW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 133.95 | ||
| EV/EBITDA | 9.37 |
4.3 Compensation for Growth
LW has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as LW's earnings are expected to decrease with -7.78% in the coming years.
PEG (NY)N/A
PEG (5Y)1.68
EPS Next 2Y-15.47%
EPS Next 3Y-7.78%
5. Dividend
5.1 Amount
LW has a Yearly Dividend Yield of 2.81%.
LW's Dividend Yield is a higher than the industry average which is at 4.32.
LW's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.81% |
5.2 History
The dividend of LW is nicely growing with an annual growth rate of 9.19%!
LW has been paying a dividend for over 5 years, so it has already some track record.
LW has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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-15.47%
EPS Next 3Y-7.78%
52.11
-0.7 (-1.33%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners100.67%
Inst Owner Change-0.42%
Ins Owners1.73%
Ins Owner Change0.2%
Market Cap7.35B
Analysts74.29
Price Target66.92 (28.42%)
Short Float %3.93%
Short Ratio1.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.81% |
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)-2.74%
PT rev (3m)-6.5%
EPS NQ rev (1m)-21.46%
EPS NQ rev (3m)-44.34%
EPS NY rev (1m)1.48%
EPS NY rev (3m)-25.67%
Revenue NQ rev (1m)-1.03%
Revenue NQ rev (3m)-7.78%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.94 | ||
| Fwd PE | 14.41 | ||
| P/S | 1.15 | ||
| P/FCF | 133.95 | ||
| P/OCF | 9.17 | ||
| P/B | 4.5 | ||
| P/tB | 14.5 | ||
| EV/EBITDA | 9.37 |
EPS(TTM)3.27
EY6.28%
EPS(NY)3.62
Fwd EY6.94%
FCF(TTM)0.39
FCFY0.75%
OCF(TTM)5.68
OCFY10.91%
SpS45.26
BVpS11.58
TBVpS3.59
PEG (NY)N/A
PEG (5Y)1.68
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 | 2.6 |
F-Score5
WACC7.12%
ROIC/WACC1.29
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-15.47%
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%