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Here's How Lamb Weston (LW) Looks Just Ahead of Q4 Earnings
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Lamb Weston Holdings, Inc. (LW - Free Report) is slated to release fourth-quarter fiscal 2020 results on Jul 28. This frozen potato products provider delivered a negative earnings surprise of 16.3% in the last reported quarter. Further, Lamb Weston has a trailing four-quarter negative earnings surprise of 0.8%, on average.
The Zacks Consensus Estimate for fourth-quarter earnings has gone up 22.2% to 11 cents per share over the past seven days. However, this suggests a slump of 85.1% from the figure reported in the year-ago period. The consensus mark for revenues stands at $811.5 million, indicating a drop of 19.1% from the year-ago period’s reported figure.
Lamb Weston Holdings Inc. Price, Consensus and EPS Surprise
Lamb Weston has been witnessing cost increases for input materials as well as manufacturing. Also, increased SG&A expenses and costs associated with COVID-19 pose threats to margins. Apart from this, the growing spread of coronavirus and the resultant social distancing have led to lower traffic at restaurants and quick-serve restaurants or QSRs, especially in the United States, leading to slower orders for Lamb Weston. In the third-quarter earnings call, management said that it expects traffic at full-service restaurants to fall more sharply than QSRs. This is likely to get reflected in the company’s results in the quarter under review.
However, the company has been seeing better trends in the Retail segment, given the increased demand for frozen fries stemming from the stockpiling during quarantine. Also, the company’s actions to enhance mix and pricing have been aiding. Additionally, Lamb Weston has been benefiting from its limited time offering products or LTO innovation as well as efforts to expand capacity.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Lamb Weston this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Nu Skin (NUS - Free Report) has an Earnings ESP of +13.74% and a Zacks Rank #1.
B&G Foods (BGS - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #2.
Kellogg (K - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Here's How Lamb Weston (LW) Looks Just Ahead of Q4 Earnings
Lamb Weston Holdings, Inc. (LW - Free Report) is slated to release fourth-quarter fiscal 2020 results on Jul 28. This frozen potato products provider delivered a negative earnings surprise of 16.3% in the last reported quarter. Further, Lamb Weston has a trailing four-quarter negative earnings surprise of 0.8%, on average.
The Zacks Consensus Estimate for fourth-quarter earnings has gone up 22.2% to 11 cents per share over the past seven days. However, this suggests a slump of 85.1% from the figure reported in the year-ago period. The consensus mark for revenues stands at $811.5 million, indicating a drop of 19.1% from the year-ago period’s reported figure.
Lamb Weston Holdings Inc. Price, Consensus and EPS Surprise
Lamb Weston Holdings Inc. price-consensus-eps-surprise-chart | Lamb Weston Holdings Inc. Quote
Key Factors to Note
Lamb Weston has been witnessing cost increases for input materials as well as manufacturing. Also, increased SG&A expenses and costs associated with COVID-19 pose threats to margins. Apart from this, the growing spread of coronavirus and the resultant social distancing have led to lower traffic at restaurants and quick-serve restaurants or QSRs, especially in the United States, leading to slower orders for Lamb Weston. In the third-quarter earnings call, management said that it expects traffic at full-service restaurants to fall more sharply than QSRs. This is likely to get reflected in the company’s results in the quarter under review.
However, the company has been seeing better trends in the Retail segment, given the increased demand for frozen fries stemming from the stockpiling during quarantine. Also, the company’s actions to enhance mix and pricing have been aiding. Additionally, Lamb Weston has been benefiting from its limited time offering products or LTO innovation as well as efforts to expand capacity.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Lamb Weston this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lamb Weston currently has a Zacks Rank #3 and an Earnings ESP of +33.33%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Nu Skin (NUS - Free Report) has an Earnings ESP of +13.74% and a Zacks Rank #1.
B&G Foods (BGS - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #2.
Kellogg (K - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>