LW
Lamb Weston Holdings, Inc.
$43.76
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 5.7% below fair value
You pay
$43.76
Bear
$38.22
Fair
$46.41
Bull
$54.59
Bear
$38.22
-12.7%
$2.67 × 14x P/E
Fair
$46.41
+6.0%
$2.67 × 17x P/E
Bull
$54.59
+24.8%
$2.67 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
16.4x
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 $49.60 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $46.41 per share.
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