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Investing.com - Stifel maintained its Hold rating and $56.00 price target on Lamb Weston (NYSE:LW), which currently trades at $52.87, as the frozen potato products company announced a significant board restructuring. According to InvestingPro analysis, the stock appears undervalued with analyst targets ranging from $56 to $82.
Lamb Weston has entered into a cooperation agreement with activist investor JANA Partners and Continental Grain that will result in the appointment of four directors proposed by JANA/Continental Grain and two additional mutually agreed-upon directors, according to Stifel analyst Matthew Smith.
The company’s board will expand to 13 directors and will be chaired by Bradley Alford, one of the JANA/Continental Grain proposed members, while four current board members, including Chairman W.G. Jurgensen, will be removed.
The board changes are expected to take place on or before July 11, 2025, with JANA Partners and Continental Grain agreeing to support Lamb Weston’s Board’s slate of directors at the 2025 annual meeting.
Additional details regarding the cooperation agreement are expected to be disclosed in upcoming financial filings from the company.
In other recent news, Lamb Weston Holdings, Inc. has undergone significant changes, starting with the appointment of six new directors to its board as part of a cooperation agreement with JANA Partners Management and Continental Grain Company. This restructuring, which includes Bradley Alford as the new Chairman, aims to strengthen customer relationships and strategic objectives. Additionally, Lamb Weston has appointed Benjamin Heselton as the new Chief Information Officer, bringing his extensive experience from Wurth IT USA to enhance the company’s global technology strategy.
On the financial front, Lamb Weston is facing challenges as BofA Securities and Citi have both lowered their price targets for the company, citing concerns over margins and competitive pressures in the foodservice industry. BofA has reduced its earnings forecasts for fiscal years 2025 and 2026, highlighting the potential impact of activist investors in accelerating a turnaround. Similarly, Citi noted ongoing volume pressures and price competition that could affect the company’s EBITDA margin.
S&P Global Ratings has revised its outlook for Lamb Weston to negative from stable, reflecting a challenging operating environment and competitive pressures. The company’s revenue is expected to decline by about 1% in fiscal 2025, with restructuring and cost savings programs impacting EBITDA margins. However, S&P anticipates a modest rebound in EBITDA by fiscal 2026, supported by cost savings initiatives and reduced restructuring costs. Lamb Weston is also navigating potential trade policy risks, which could impact its international revenue streams.
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