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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Lamb Weston Holdings, Inc. (XNYS:LW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LW
Name:
LAMB WESTON HOLDINGS, INC. (XNYS:LW)
Sector:
82.90M
Industry:
Packaged Foods
CEO:
Mr. Thomas Werner
Total Employees:
8,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -131.69% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LAMB WESTON HOLDINGS, INC.(LW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
78.23
One Month Price Target:
$78.46
Six Month Price Target :
$79.62
Likely Price in One Year's Time:
Ticker:
$81.01
Likely Trading Range Today Under (Normal Volatility)
$77.89
Price Upper limit ($) :
$78.61
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$73.89
This week:
$68.52
This month :
$58.81
Other Primary facts
Market Cap:
11.24B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
143.72M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.36%
-17.87%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$98.39
$89.18
$58.07
$67.28
Medium risk (<10%) entry points
Buy Call
Sell Call
$86.18
Buy Put:
Sell Put:
$84.21
$70.25
$72.25
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LW
Sharpe Ratio:
0.64%
Comparison:
LW, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -50.82% lower than the industry
& is -71.72% lower than the market/S&P 500 average
Average Returns/Yield of
LW
Daily returns:
0.03%
Weekly returns:
0.13%
Monthly returns:
0.53%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is -24.88% below industry average
Classification:
LW, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.99
Statistical test of Returns:
LW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.72%
Weekly Volatility:
6.07%
Monthly Volatility:
12.14%
Yearly Volatility:
42.07%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.70%
Volatility in last five trading days has been -74.13% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.55%
Weekly VaR:
-12.41%
Monthly VaR:
-24.82%
How Much Can the price of
LW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-85.99%
This translates to price declining to:
$61.29
This translates to price declining to:
$10.96
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
LW is a 75.19% riskier investment compared to the market/S&P 500 & is 50.09% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 18.71% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LW
Beta in relation to market/S&P 500--0.53
Expected beta in 1 year's time:
0.558
Expected beta in 3 year's time:
0.789
Unlevered (debt free) Beta:
0.094
Beta in relation to Nasdaq (XNAS):
0.724
Beta in relation to all global stocks::
0.77
Beta Comparison & Analysis
Beta of competitors/peers::
1.017
Beta is -48.00% lower than peers
Average Industry Beta:
0.586
Beta is -9.73% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.80%
Sustainable growth rate is 41.36% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.004
Alpha is -135.77% below industry average alpha yield
Alpha is -29% below the market average
Analysis of Cost of Capital of
LW
Equity cost of capital:
0.068
Equity cost of capital is -5.45% below industry mean WACC
Unlevered (without debt) cost of capital:
1.20%
Before-tax cost of debt:
5.97%
After-tax cost of debt:
4.72%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.72%
WACC is -4.24% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$27.51
Revenue growth rate per share of (3Y):
26.31
Annual revenue growth rate is -79.93% below industry average
EPS:
$1.60
Expected Annual growth rate of EPS (3Y):
-25.48%
Expected future EPS growth rate is -241.28% lower than the Packaged Foods industry
Free cash flow (FCF) per share:
$0.55
Balance sheet equity growth per share: 22.67%
Equity growth rate per share is 366.94% higher than the industry
Debt per share
$18.78
EBITDA per share
$4.53
Valuation Analysis Today of
LW
P/E Ratio:
56.76
P/E Ratio of Competitors/Peers:
33.29
P/E ratio is 70.49% higher than main peers & is 46.88% higher than the industry
Stock price/value with industry average P/E ratio: $61.82
LW is 26.54% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $42.10
Present value of the expected future dividends only: $21.16
P/S (Price to Sales ratio):
2.84
Price to sales ratio is 22.64% above the industry mean
P/B (Price to book value ratio):
26.31
Price to free cash flow: 143.18
Price to free cash flow ratio is 48.46% higher than the industry
Net income growth rate (3Y):
-23.82%
Net income growth rate is -321.40% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 14.68%
Dividend yeild: 1.23%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $0.96
Expected next dividend best case: $0.25
Expected next dividend worst case: $0.24
Average dividend payment (long-term): $0.23
Average dividend increase/decrease (growth rate) % per period: 2.14%
Expected next dividend payment date: 09/01/2022
Expected next dividend record date: 08/04/2022
Expected next dividend declaration date: 22/06/2022
Previous dividend payment date: 06/03/2022
Previous dividend record date: 05/06/2022
Previous dividend declaration date: 24/03/2022
Dividend History:
2022-05-05--$0.25
2021-11-04--$0.24
2021-05-06--$0.24
2022-02-03--$0.25
2021-08-05--$0.24
2021-02-04--$0.24
Dividend growth rate is -690.31% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
631.40%
Net debt to equity ratio:
460.69%
Debt to assets ratio:
64.62%
Net debt to assets ratio:
47.15%
Debt-to-asset ratio is 19.89% above industry average
Ability to repay debt:
Interest coverage ratio:
3.95
Interest coverage ratio is -98.40% less than industry average
Looking forward:
Debt growth rate:
-22.47%
Annual debt growth is -108% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.29%
Analysis of Key Statistics
Correlation of price movement with the market:
0.586
Statistical significance of correlation:
LW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is 36.59% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
0.042
Covariance of price movement with the market:
0.066
Kurtosis
9.652
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.587
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
LW
Gross Profit Margin Ratio:
79%
Operating Profit Margin Ratio:
10.30%
Operating profit margin is 113.45% higher than the industry
Net Profit Margin Ratio:
79%
Effective Tax Rate:
26.27%
Effective tax rate is -35.56% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
54.84%
Return on equity (ROE) is 396.46% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.61%
Return on assets (ROA) is 25.68% higher than the industry
Financial Leverage:
2.8x
Current Ratio:
2.67
Current ratio is -2.69% below industry average
Cash Conversion Cycle (days):
5.5
Cash conversion cycle is -88.76% below industry average
The remaining useful life of property plant & equipment is: 9.5 years
Stock based compensation to net income ratio:
2.22%
In-depth Efficiency Analysis
Revenue generated per employee:
494.2K
Each employee generates -37% less revenue than industry average revenue per employee
EBITDA generated per employee:
81.4K
Each employee generates -28% less EBITDA than industry average revenue per employee
Profit generated per employee:
29.3K
Each employee generates -44% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.4K
Each employee generates -378% less free cash flow than industry average revenue per employee
Assets/Capital per employee
305.2K
Each employee generates -378% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LW
DARLING INGREDIENTS INC. (XNYS:DAR)
MOLSON COORS BEVERAGE COMPANY (XNYS:TAP)
MOLSON COORS BEVERAGE COMPANY (XNYS:TAP)
BJ'S WHOLESALE CLUB HOLDINGS, INC. (XNYS:BJ)
COTY INC. (XNYS:COTY)
US FOODS HOLDING CORP. (XNYS:USFD)
Post Holdings, Inc. (XNYS:POST)
PERFORMANCE FOOD GROUP COMPANY (XNYS:PFGC)
BUNGE LIMITED (XNYS:BG)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
2/27/22
Revenue:
3.95B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.18B
775.80M
-
-
368.50M
-
-
368.50M
-
164.80M
187.90M
650.80M
407.30M
234.40M
242.50M
63.70M
234.40M
Statement of Cash Flow
Date:
Period:
47.30M
Differed Income Tax :
1.70M
Stock Based Compensation :
5.20M
Change in Working Capital :
72.80M
Accounts Receivables:
-
Other Working Capital:
9.70M
Other Non-Cash Items:
5.00M
Net Cash Provided by Operating Activities:
161.80M
Investments in PP&E:
- 78900.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
8/29/21
2022
Q1
789.70M
-
789.70M
401.30M
469.20M
74.80M
1.74B
1.70B
323.50M
35.80M
298.80M
-
82.40M
2.44B
-
4.18B
380.40M
60.10M
13.50M
-
209.50M
650.00M
2.70B
240.60M
3.10B
-
3.75B
148.00M
1.24B
7.3M
- 967900.00K
August 29, 2021 at 6:00:00 AM
3.55B
427.40M
4.18B
-
2.76B
2.0B
-
100.00K
- 78800.00K
- 7900.00K
-
- 33400.00K
- 34400.00K
- 100.00K
- 75800.00K
- 1000.00K
6.20M
789.70M
783.50M
161.80M
- 78900.00K
82.90M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
LW
2023
2024
2025
2026
2027
$77.47
$80.23
$83.08
$86.03
$89.09