Dear reader,
Most investors run from volatility. The method I have used for the last decade turns it into a weekly paychecks.
Instead of betting on which way the market moves, this strategy harvests income from the swings themselves.
One setup. Once a week. Designed to pay, week after week — without guessing direction or day trading.
[See how volatility becomes cash flow →]
Lamb Weston: Is the King of Spuds a Buy or a Dud for 2026?
Written by Thomas Hughes. Published 10/1/2025.
Key Points
- Lamb Weston reaffirmed its guidance and capital return outlook, driven by solid FQ1 results.
- Buybacks reduce the count substantially each quarter and are expected to continue for the foreseeable future.
- Institutional trends indicate the group is buying aggressively, with shares near long-term lows.
Lamb Weston's (NYSE: LW) FQ1 report and guidance update confirm that the king of spuds is no dud. The company reaffirmed its full-year outlook—validating both its cash flow projections and capital return plan. As a fast-moving consumer goods company, Lamb Weston offers a meaningful dividend and executes aggressive share repurchases, providing long-term investors with potential for double-digit total returns.
Its dividend, currently yielding about 2.5% in early October, merits consideration on its own. While the payout ratio sits near 60% of earnings, this aligns with peers and isn't unsustainable. Even more compelling is the cash-flow payout ratio, which was only 17% in Q1—ample room to support the company's targeted double-digit distribution CAGR.
RIP USA (Ad)
"The America you knew is dying in front of you"
That's the urgent warning the former $200 million hedge fund firm manager who predicted 2008 and 2020 just issued. He says if you're over 50, there's one urgent move you need to make to survive... or risk getting left behind.
The share buyback program is equally robust. Lamb Weston pared its share count by roughly 2% in fiscal 2025 and is on track for a similar or higher reduction in fiscal 2026. Repurchases accelerated to over 3.5% of outstanding shares in FQ1, and the current authorization still delivers significant capacity for future buybacks.
No red flags emerge from the balance sheet. At the end of Q1, assets and liabilities both declined, resulting in low leverage and a boost to equity. In fact, equity rose despite share repurchases and higher dividend distributions.
Lamb Weston Sustains Growth in a Challenging Environment
Lamb Weston's FQ1 performance was solid. Revenue of $1.66 billion rose about 0.5%, outpacing MarketBeat's consensus. Results were driven by a 6% volume increase and a 1% favorable FX translation, offset by a 7% price decline.
The price decrease largely reflects the shutdown of the Washington processing plant and discontinuation of its products. Management doesn't expect this to persist and anticipates margin improvement as the transition completes. International sales led growth—up 4% on FX gains—while North American volumes dipped 2%.
Margin comparisons were pressured by one-time costs and mix shifts from discontinued lines, but the declines were smaller than feared. GAAP EPS of $0.74 exceeded consensus by $0.21—about 4,000 basis points—which bodes well for cash flow and future capital returns.
Management also reaffirmed its full-year revenue guidance, with the midpoint roughly in line with Street expectations. The outlook anticipates modest growth and sufficient earnings to fund ongoing investments and shareholder returns.
Analysts Cap Gains for LW; Institutions Provide a Supportive Floor
Analysts remain cautious on LW, with reduced coverage, a consensus Hold rating, and downwardly revised price targets. The average model still implies roughly 12% upside as of early October, but that estimate is drifting toward the lower end of the range. Encouragingly, that level coincides with key technical support and robust institutional demand.
Institutions control nearly 90% of LW's float, creating a solid support base. They have been net buyers all year and are likely to continue adding shares at these valuations. Trading in the low teens on a 2030 EPS multiple, LW stock could see 50% appreciation by decade's end if forecasts hold.
This email message is a paid sponsorship from Traders Edge Network, a third-party advertiser of Earnings360 and MarketBeat.
If you need assistance with your subscription, feel free to contact MarketBeat's U.S. based support team at contact@marketbeat.com.
If you no longer wish to receive email from Earnings360, you can unsubscribe.
© 2006-2025 MarketBeat Media, LLC. All rights protected.
345 N Reid Place #620, Sioux Falls, South Dakota 57103-7078. USA..
