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Lamb Weston (LW) Gains But Lags Market: What You Should Know

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In the latest trading session, Lamb Weston (LW - Free Report) closed at $86.14, marking a +0.15% move from the previous day. The stock lagged the S&P 500's daily gain of 0.73%. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq added 0.16%.

Heading into today, shares of the frozen foods supplier had gained 7.36% over the past month, outpacing the Consumer Staples sector's gain of 4.88% and the S&P 500's gain of 0.09% in that time.

Lamb Weston will be looking to display strength as it nears its next earnings release, which is expected to be January 5, 2023. On that day, Lamb Weston is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 48%. Meanwhile, our latest consensus estimate is calling for revenue of $1.16 billion, up 15.15% from the prior-year quarter.

LW's full-year Zacks Consensus Estimates are calling for earnings of $3.03 per share and revenue of $4.7 billion. These results would represent year-over-year changes of +45.67% and +14.64%, respectively.

Any recent changes to analyst estimates for Lamb Weston should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Lamb Weston is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Lamb Weston is currently trading at a Forward P/E ratio of 28.36. Its industry sports an average Forward P/E of 20, so we one might conclude that Lamb Weston is trading at a premium comparatively.

Also, we should mention that LW has a PEG ratio of 1.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Food - Miscellaneous industry currently had an average PEG ratio of 2.98 as of yesterday's close.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 47, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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