Yahoo Finance Lamb Weston Holdings, Inc. Just Missed EPS By 27%: Here's What Analysts Think Will Happen Next
Lamb Weston Holdings, Inc. (NYSE:LW) just released its latest quarterly report and things are not looking great. Unfortunately, Lamb Weston Holdings delivered a serious earnings miss. Revenues of US$1.5b were 12% below expectations, and statutory earnings per share of US$1.01 missed estimates by 27%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Lamb Weston Holdings
Taking into account the latest results, the current consensus from Lamb Weston Holdings' eleven analysts is for revenues of US$7.01b in 2025. This would reflect an okay 6.9% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to descend 19% to US$6.17 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$7.27b and earnings per share (EPS) of US$6.59 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
The consensus price target fell 9.1% to US$117, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Lamb Weston Holdings analyst has a price target of US$132 per share, while the most pessimistic values it at US$98.00. This is a very narrow spread of estimates, implying either that Lamb Weston Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Lamb Weston Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.5% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.7% per year. So it's pretty clear that, while Lamb Weston Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Lamb Weston Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lamb Weston Holdings analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Lamb Weston Holdings you should be aware of, and 1 of them is concerning.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
