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Investing.com - Bernstein SocGen Group has raised its price target on Lamb Weston (NYSE:LW) to $62.00 from $55.00 while maintaining a Market Perform rating on the stock. The stock has shown strong momentum with a 13.27% return over the past week, and according to InvestingPro analysis, the company appears undervalued based on its Fair Value estimate.
The price target increase follows what Bernstein described as "very solid results" from the food processing company, driven by strong volumes and effective cost containment measures. Lamb Weston reported quarterly results that exceeded expectations, while its fiscal year 2026 guidance showed sales slightly ahead of expectations. InvestingPro data reveals the company maintains a healthy financial position with a current ratio of 1.38, indicating strong liquidity, and has consistently raised its dividend for 8 consecutive years.
Bernstein noted that Lamb Weston’s new management team has introduced a "Focus to Win" plan aimed at improving execution and delivering at least $200 million in ongoing cost savings by the end of fiscal year 2027. The plan also targets reducing working capital by $120 million in the same timeframe, with cost savings expected to increase to $250 million by the end of fiscal year 2028.
Capital expenditures are projected to decrease from approximately $638 million in fiscal year 2025 to $500 million in fiscal year 2026, including a $100 million investment in wastewater treatment. This represents a significant reduction from the $930 million spent in fiscal year 2024.
Despite these positive developments, Bernstein highlighted that broader category trends remain weak, with restaurant traffic reported to be down in low-single digits in both the U.S. and U.K. The firm specifically mentioned struggling burger chain traffic, which it suspects may be partly influenced by increased use of GLP-1 weight loss drugs. For deeper insights into Lamb Weston’s market position and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro, which includes expert analysis and key metrics among 1,400+ top stocks.
In other recent news, Lamb Weston Holdings Inc . reported a robust fiscal fourth quarter for 2025, significantly surpassing earnings and revenue forecasts. The company achieved earnings per share of $0.87, which was well above the anticipated $0.64, representing a 35.94% surprise. Additionally, revenue reached $1.68 billion, exceeding the forecasted $1.59 billion by 5.66%. In a related development, Jefferies raised its price target for Lamb Weston to $67 from $60, maintaining a Buy rating on the stock. This adjustment follows what Jefferies described as a "solid volume-led beat" in Lamb Weston’s fourth-quarter results. The company has implemented price investments in North America to support its customers and maintain its market position. These recent developments highlight the company’s strong performance and strategic initiatives.
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