Is Lamb Weston Holdings, Inc. (LW) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $57.16, Lamb Weston Holdings, Inc. (LW) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $20.78 and $95.86 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Lamb Weston Holdings, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 8.3%, with a long-run terminal growth rate of 2.5%. About 77% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, LW's modeled DCF value ranges from about $19.07 to $84.61 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Lamb Weston Holdings, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of LW's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind LW's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $6,485,200,000 | Lamb Weston Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0001679273-26-000024, filed 2026-07-24); ties to FY2026 10-K (accession 0001679273-26-000026): FY2026 reported net sales $6,612.3M (+2% on FY2025's $6,451.3M: volume +7%, price/mix -6%, FX +1%) LESS the $127.1M the company itself attributes to the 53rd week = $6,485.2M, the 52-week figure. FIFTY-THREE-WEEK TRAP: management guides FY2027 sales growth of '0.0% to 1.0%' against this 52-week figure ('Fiscal 2026 (52-week adjusted) $6.5 billion'). Using the reported $6,612M as the base would turn a guided 0-1% INCREASE into a fake ~1.4% decline and mechanically fire the site's cyclical range-only flag for a calendar artefact, not a downturn. The extra week is a one-off timing item, so it is removed from the base rather than modeled as a decline. CROSS-CHECK: Q4 FY2026 (14 weeks) sales $1,770.1M, $1,615.3M excluding FX and the extra week. Segment split FY2026: North America $4,395.2M (66%), International $2,217.1M (34%). |
| Base EBIT margin | 9.5% | Lamb Weston Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0001679273-26-000024, filed 2026-07-24) + FY2026 10-K Note 4 (Cost Savings Program and Restructuring): HOUSE MEASURE = GAAP income from operations EXCLUDING ONLY NON-CASH restructuring write-downs (the equivalent of impairments). FY2026 GAAP operating income $591.1M (8.94%) + $48.3M of the $111.6M restructuring charges that the 10-K (Note 4) says were non-cash = $639.4M; less the 53rd week's contribution (adjusted EBITDA $28.9M per the release, less roughly one week of D&A ~$7.5M = ~$21.4M) = ~$618M / $6,485.2M = 9.5%. LEFT IN as real costs: the $63.3M of CASH restructuring (severance, consultants, contracted potatoes), stock-based compensation ($46.2M) and the $14.2M pension settlement. Lamb Weston's own 'adjusted income from operations' was $738.8M (11.2%) but it ADDS BACK stock-based compensation as well as all restructuring, so this base deliberately sits below it. CONTEXT (XBRL): GAAP operating margin was 16.4-17.8% in FY2017-FY2019, 10.8-14.7% in FY2020-FY2022 (pandemic, then cost inflation), 16.5% in FY2023-FY2024, then 10.3% in FY2025 and 8.9% in FY2026 as industry capacity outran demand. The base margin only feeds the cyclical-fade check; cash flows run off the forecast path. |
| Forecast revenue growth | 0% → 2% → 3% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide rate shared by every researched model. |
| Beta | 1.00 | Assumption — normalized estimate (published 5Y-monthly beta via yfinance): Published 5Y-monthly beta is 0.474 (yfinance 2026-10-06). NORMALIZED UP to 1.0 - CONSERVATIVE: it raises WACC and LOWERS the value. Reason: at 0.474 the cost of equity is 7.6%, only ~0.6pp above the ~7.0% Lamb Weston would pay on new BB+ debt; equity junior to sub-investment-grade bonds cannot plausibly be that cheap. Bond-yield-plus-premium cross-check: ~7.0% + the conventional 3-4pp = 10-11%; beta 1.0 gives 10.24%, the low end. A low trailing beta also says little about a stock that fell from ~$107 (July 2023, dividend-adjusted) to the low 40s on company-specific margin collapse, and that S&P moved from the S&P 500 to the S&P 600 in March 2026 (10-K Item 5). Sizing: the published 0.474 gives ~$63/share; 0.8 ~$45.50; 1.2 ~$31. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP). Frozen potatoes are a mature, slowly growing category (the 10-K assumes flat global restaurant traffic for FY2027); 2.5% assumes volume roughly with population plus food inflation. Must remain < WACC of 8.25%. At 2.0% the value falls ~$4.30/share. |
| Diluted shares | 138M | Lamb Weston Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0001679273-26-000024, filed 2026-07-24), Consolidated Statements of Earnings: Q4 FY2026 (14 weeks to 2026-05-31) weighted-average diluted shares 138.0M (full year 139.1M). Outstanding: 137,455,441 at 2026-05-31 (10-K); the 2026-09-16 annual-meeting 8-K counts 115,548,380 shares represented as ~84.0% of outstanding, i.e. ~137.6M. FY2027 guidance: 'Diluted outstanding common shares in the range of 137.5 million to 139.0 million'. ~$245M of buyback authorization remains. |
| Market price | $57.16 | Delayed quote · as of 2026-11-10 05:27 UTC |
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