LW
Lamb Weston Holdings, Inc.
$49.90
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 2.0% above fair value
You pay
$49.90
Bear
$40.28
Fair
$48.90
Bull
$57.53
Bear
$40.28
-19.3%
$2.84 × 14x P/E
Fair
$48.90
-2.0%
$2.84 × 17x P/E
Bull
$57.53
+15.3%
$2.84 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
17.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $50.67 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $48.90 per share.
Warnings
The company's reported profits differ from official accounting profits by 37%. Check what costs are being left out of the adjusted number.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples