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 88 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. LW has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year LW was profitable.
In the past year LW had a positive cash flow from operations.
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 65.91% of its industry peers.
LW's Return On Equity of 22.47% is amongst the best of the industry. LW outperforms 92.05% of its industry peers.
With a decent Return On Invested Capital value of 9.17%, LW is doing good in the industry, outperforming 79.55% of the companies in the same industry.
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 has a Profit Margin of 5.75%. This is in the better half of the industry: LW outperforms 76.14% of its industry peers.
LW's Profit Margin has declined in the last couple of years.
The Operating Margin of LW (12.35%) is better than 79.55% 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 has a Gross Margin (22.61%) which is in line with 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so LW is still creating some value.
Compared to 1 year ago, LW has less shares outstanding
The number of shares outstanding for LW has been reduced compared to 5 years ago.
The debt/assets ratio for LW has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.61 indicates that LW is not a great score, but indicates only limited risk for bankruptcy at the moment.
LW has a Altman-Z score of 2.61. This is comparable to the rest of the industry: LW outperforms 57.95% of its industry peers.
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 has a Debt to FCF ratio (77.32) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.55 is on the high side and indicates that LW has dependencies on debt financing.
The Debt to Equity ratio of LW (2.55) is worse than 86.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.55 | ||
| Debt/FCF | 77.32 | ||
| Altman-Z | 2.61 |
ROIC/WACC1.27
WACC7.25%
2.3 Liquidity
LW has a Current Ratio of 1.35. This is a normal value and indicates that LW is financially healthy and should not expect problems in meeting its short term obligations.
LW has a Current ratio of 1.35. This is comparable to the rest of the industry: LW outperforms 46.59% of its industry peers.
A Quick Ratio of 0.58 indicates that LW may have some problems paying its short term obligations.
LW has a Quick ratio of 0.58. This is in the lower half of the industry: LW underperforms 69.32% 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.
LW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.97% yearly.
EPS Next Y-37.31%
EPS Next 2Y-13.84%
EPS Next 3Y-7.34%
EPS Next 5Y7.03%
Revenue Next Year-2.93%
Revenue Next 2Y-1.05%
Revenue Next 3Y0.12%
Revenue Next 5Y3.97%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
A Price/Earnings ratio of 16.38 indicates a correct valuation of LW.
Based on the Price/Earnings ratio, LW is valued a bit cheaper than the industry average as 67.05% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.29. LW is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.26, which indicates a correct valuation of LW.
LW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LW is cheaper than 77.27% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, LW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.38 | ||
| Fwd PE | 14.26 |
4.2 Price Multiples
LW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LW is cheaper than 63.64% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as LW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 137.68 | ||
| EV/EBITDA | 9.46 |
4.3 Compensation for Growth
LW has a very decent profitability rating, which may justify a higher PE ratio.
LW's earnings are expected to decrease with -7.34% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.73
EPS Next 2Y-13.84%
EPS Next 3Y-7.34%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.75%, LW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.36, LW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.52, LW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
5.2 History
On average, the dividend of LW grows each year by 9.19%, 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)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-13.84%
EPS Next 3Y-7.34%
53.56
+0.16 (+0.3%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners100.67%
Inst Owner Change0.01%
Ins Owners1.73%
Ins Owner Change0.2%
Market Cap7.56B
Analysts74.29
Price Target66.03 (23.28%)
Short Float %7.52%
Short Ratio3.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
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)-4.04%
PT rev (3m)-7.75%
EPS NQ rev (1m)-21.74%
EPS NQ rev (3m)-44.34%
EPS NY rev (1m)-0.23%
EPS NY rev (3m)-26.75%
Revenue NQ rev (1m)-1.27%
Revenue NQ rev (3m)-7.78%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.38 | ||
| Fwd PE | 14.26 | ||
| P/S | 1.18 | ||
| P/FCF | 137.68 | ||
| P/OCF | 9.42 | ||
| P/B | 4.63 | ||
| P/tB | 14.9 | ||
| EV/EBITDA | 9.46 |
EPS(TTM)3.27
EY6.11%
EPS(NY)3.76
Fwd EY7.01%
FCF(TTM)0.39
FCFY0.73%
OCF(TTM)5.68
OCFY10.61%
SpS45.26
BVpS11.58
TBVpS3.59
PEG (NY)N/A
PEG (5Y)1.73
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 | 2.61 |
F-Score5
WACC7.25%
ROIC/WACC1.27
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-37.31%
EPS Next 2Y-13.84%
EPS Next 3Y-7.34%
EPS Next 5Y7.03%
Revenue 1Y (TTM)-2.49%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%4.27%
Revenue Next Year-2.93%
Revenue Next 2Y-1.05%
Revenue Next 3Y0.12%
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%