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What Do Investors Need To Know About Lamb Weston Holdings, Inc.’s (NYSE:LW) Future?

Simply Wall St

In November 2018, Lamb Weston Holdings, Inc. (NYSE:LW) released its earnings update. Generally, analyst forecasts appear to be bearish, with earnings expected to decline by -0.1% in the upcoming year compared with the past 5-year average growth rate of 13%. Currently with a trailing-twelve-month profit of US$414m, the consensus growth rate suggests that earnings will drop to US$414m by 2020. Below is a brief commentary around Lamb Weston Holdings’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for Lamb Weston Holdings

What can we expect from Lamb Weston Holdings in the longer term?

The view from 6 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of LW’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NYSE:LW Past and Future Earnings, March 11th 2019

By 2022, LW’s earnings should reach US$479m, from current levels of US$414m, resulting in an annual growth rate of 6.4%. EPS reaches $3.7 in the final year of forecast compared to the current $2.83 EPS today. With a current profit margin of 12%, this movement will result in a margin of 12% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Lamb Weston Holdings, I’ve compiled three fundamental aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Lamb Weston Holdings worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Lamb Weston Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Lamb Weston Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.