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Lamb Weston (LW) Gains But Lags Market: What You Should Know
Lamb Weston (LW - Free Report) closed at $99.65 in the latest trading session, marking a +0.58% move from the prior day. The stock lagged the S&P 500's daily gain of 1.3%. At the same time, the Dow added 0.98%, and the tech-heavy Nasdaq gained 7.48%.
Prior to today's trading, shares of the frozen foods supplier had lost 1.39% over the past month. This has lagged the Consumer Staples sector's loss of 1.2% and was narrower than the S&P 500's loss of 2.95% in that time.
Lamb Weston will be looking to display strength as it nears its next earnings release, which is expected to be April 6, 2023. In that report, analysts expect Lamb Weston to post earnings of $0.98 per share. This would mark year-over-year growth of 34.25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.18 billion, up 23.34% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.95 per share and revenue of $4.88 billion, which would represent changes of +89.9% and +18.99%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Lamb Weston. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. Lamb Weston currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that Lamb Weston has a Forward P/E ratio of 25.1 right now. For comparison, its industry has an average Forward P/E of 18.06, which means Lamb Weston is trading at a premium to the group.
It is also worth noting that LW currently has a PEG ratio of 0.84. 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 2.63 as of yesterday's close.
The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 43% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.