Shares of Lamb Weston (NYSE:LW) gained about 10% in yesterday’s trading session on better-than-expected fiscal second-quarter results. Also, the provider of frozen potato products raised its full-year outlook owing to strong business performance in the first half of Fiscal Year 2023.
The company’s Q2 sales grew 27% year-over-year to $1.28 billion, exceeding analysts’ expectations of $1.15 billion. Meanwhile, adjusted earnings per share (EPS) increased by approximately 172% to $1.28, exceeding the Street’s expectations of $0.74.
The quarterly performance was driven by a favorable price mix that largely offset lower volumes, supply chain issues, and inflationary effects.
Regarding updated guidance, Lamb Weston expects adjusted EPS in the range of $3.75 to $4.00, compared to the $2.45 to $2.85 previously guided. Moreover, it anticipates full-year sales of $4.8 billion to $4.9 billion, up from prior guidance of $4.7 billion to $4.8 billion.
Lamb Weston CEO, Tom Werner, said, “We expect the continued implementation of pricing actions to counter higher input and potato costs to drive our financial results in the second half, while our volume performance will continue to be affected by supply chain constraints and inflationary pressures on consumers.”
Is Lamb Weston Stock a Buy or Sell?
LW stock has a Moderate Buy consensus rating based on two Buy and one Hold recommendations. The average Lamb Weston price target of $89.67 implies downside potential of 6.6%.