Stifel raises Lamb Weston stock price target to $63 on strong Q1 results

Published 01/10/2025, 13:04
Stifel raises Lamb Weston stock price target to $63 on strong Q1 results

Investing.com - Stifel raised its price target on Lamb Weston (NYSE:LW) to $63.00 from $61.00 on Wednesday, while maintaining a Hold rating on the food processing company’s stock. According to InvestingPro data, the stock has shown strong momentum with an 8% gain over the past week, though it remains approximately 31% below its 52-week high of $83.98.

The price target increase follows Lamb Weston’s stronger-than-expected first quarter of fiscal year 2026, which showed sequentially stronger volume growth in North America and gross margins exceeding analyst expectations.

Lamb Weston reported quarterly EBITDA of $302.2 million, representing a 1% increase from the prior year and $41.5 million above Stifel’s estimate, which included a $7 million non-repeating benefit.

The company has maintained its fiscal year 2026 outlook, with 25% of contracts still awaiting finalization in the second quarter.

Stifel noted that momentum behind Lamb Weston’s recovery is increasing, supported by improving company fundamentals and external factors including an above-average 2026 potato crop and improving capacity utilization outlook in North America.

In other recent news, Lamb Weston Holdings Inc . reported strong financial results for the first quarter of fiscal year 2026, exceeding analysts’ expectations. The company posted an earnings per share (EPS) of $0.74, which was significantly above the forecasted $0.55, marking a 34.55% surprise. Additionally, revenue reached $1.66 billion, surpassing the anticipated $1.62 billion. These results were driven by strong volume growth, new customer wins in North America, and improved sales in quick-service restaurants overseas. In light of these developments, Bernstein SocGen Group raised its price target for Lamb Weston to $65.00 from $62.00, while maintaining a Market Perform rating. Bernstein attributed the target increase to what it described as "an encouraging quarter" for the company. These recent developments highlight the company’s robust performance and positive market reception.

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