LW - Lamb Weston Isn't As Cheap As It May Seem
2024-07-10 23:38:09 ET
Summary
- Lamb Weston stock is down sharply year-to-date, and investors may think it is a good dip-buying opportunity.
- I believe the company is a commodity producer and should trade at a discount to branded packaged foods companies.
- Lamb Weston's profit margins already recovered to pre-pandemic levels, whereas most of the industry is still in a substantial downturn.
- I believe Lamb Weston has much less upside than peers, and the recent ERP system blunder adds further uncertainty.
Shares of potato processing company Lamb Weston ( LW ) plunged more than 20% on its most recent earnings report. And, after a brief bounce, the stock has resumed its downtrend, falling to new 52-week lows over the past few days. Additionally, shares are now back below where they traded back at the start of 2020: