Lamb Weston: Passing The Bottom, But Challenges Remain (Downgrade)

Shares of Lamb Weston Holdings, Inc. (LW) have been a poor performer over the past year, losing about 16% of their value and missing out on a strong market rally. The company has been plagued by several challenges over the past year, including North American volume growth and margin stabilization offset ongoing international headwinds and elevated freight costs, supporting a secure 3.1% dividend yield. Fiscal 2027 guidance calls for 1%-2% sales growth and 2%-12% EPS growth, with free cash flow expected at $370-$390 million. I am moving LW to a "Hold" rating as shares reflect fair value near $50, with upside limited after the recent rally.