Retirement Stock Portfolio: 10 Consumer Stocks To Buy

7. Lamb Weston Holdings Inc. (NYSE:LW)

Dividend Yield: 1.89%

Number of Hedge Fund Holders: 37

Lamb Weston Holdings Inc. (NYSE:LW) is a leading food processing company and one of the world’s largest producers of frozen potato products, including French fries, waffle fries, and other frozen offerings. The company primarily serves restaurant chains and food service distributors, with retail sales contributing less than 20% of its revenue.

On October 18, Citi raised its price target for Lamb Weston Holdings Inc. (NYSE:LW) from $76 to $90 while maintaining a Buy rating. This update followed activist filings by JANA Partners, which disclosed a 5.0% stake in the company, and Continental Grain, holding a 0.4% interest. Citi expressed optimism about Lamb Weston’s growth prospects, citing fundamental improvements such as volume recovery, enhanced operating leverage, and a more favorable pricing environment as key drivers for potential share price appreciation in the coming year.

For Q1 fiscal year 2025, Lamb Weston Holdings Inc. (NYSE:LW) reported mixed results. While total sales experienced a slight 1% year-over-year decline, the company exceeded expectations on sales performance due to a better volume and price mix. Adjusted EBITDA for the quarter came in at $290 million, reflecting solid operational execution despite broader challenges.

Diamond Hill Long-Short Fund stated the following regarding Lamb Weston Holdings, Inc. (NYSE:LW) in its Q2 2024 investor letter:

“Still-rising valuations have made identifying attractively valued, long ideas increasingly challenging — though we still found a few in Q2 that we believe the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. We established new long positions in VeriSign, Ulta Beauty, Sysco Corporation and Lamb Weston Holdings, Inc. (NYSE:LW) during the quarter.

Lamb Weston is the US’s leading supplier of frozen French fries. Shares have been pressured amid a slowdown in quick-service restaurant traffic — which gave us a compelling opportunity to capitalize on what we consider a large dislocation in price and intrinsic value.”