Lamb Weston’s (LW) Latest Expansion Effort Accelerates Growth – March 1, 2023
Lamm Weston Holdings, Inc. (Lw – Free Report) announced that it has completed the acquisition of the remaining equity interests in its European joint venture with Meijer Frozen Foods BV. The transaction was originally announced in October 2022 and is priced at EUR 525 million in cash and common shares of the company.
Upon completion, the company now owns 100% of Lamb-Weston/Meijer, vof. It acquired five additional manufacturing units to establish its global presence, including four facilities in the Netherlands and one in the UK. In addition, the company now owns a sixth manufacturing unit through a 75% stake in a joint venture in Austria.
Overall, the acquisition is consistent with LW’s acquisition framework. We believe this move will solidify Lamb Weston’s manufacturing footprint to better serve its customers and capture growth opportunities.
Zacks Rank #1 (Strong Buy) stock is up 16.3% over the past three months while the industry is down 5.1%.
Capacity expansion efforts solid
Lamb Weston’s solid balance sheet and ability to generate cash means it is well positioned to increase production capacity and drive long-term growth. In September 2022, LW unveiled expansion plans for french fries processing capacity in Argentina with the construction of a new production unit in Mar del Plata, Buenos Aires.
In July 2021, the Company announced it would expand french fry processing capacity at its existing facility in American Falls, ID – with a planned capacity to produce more than 350 million pounds of frozen french fries and other potato products annually. In March 2021, the company announced plans to build a new french fry processing facility in Ulanqab, Inner Mongolia, China.
Aside from the capacity expansion efforts mentioned above, in July 2022 Lamb Weston acquired an additional 40% interest in Lamb Weston Alimentos Modernos SA (“LWAMSA”) – their joint venture in Argentina – bringing their total ownership interest to 90%. .
All in all, Lamb Weston’s efforts to expand offerings and expand capacity allow the company to effectively meet the increasing demand for snack foods and french fries.
Some top notch food bets
Some other high ranking stocks are Conagra Brands (KAG – free report) post holding (POST – Free report) and Mondelez International, Inc. (MDLZ – free report).
Conagra, a consumer staples food company, is currently ranked #1 by Zacks. CAG has a trailing four-quarter earnings surprise averaging 8.9%. You can see the full list of today’s Zacks #1 Rank stocks can be found here.
Zacks consensus estimates for Conagra’s sales and earnings for the current fiscal year indicate growth of 7.2% and 12.7%, respectively, over the corresponding prior-year numbers.
Post Holdings, a consumer products company, currently has a Zacks rank of #1. Post Holdings has a trailing four-quarter earnings surprise averaging 34.8%.
The Zacks Consensus estimate for POST’s sales and earnings for the current fiscal year points to growth of 1.6% and 111.3%, respectively, over the numbers reported last year.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, has a Zacks Rank of 2 (Buy). MDLZ has a trailing four-quarter earnings surprise averaging 7.5%.
Zacks consensus estimates for Mondelez’s fiscal-year sales and earnings indicate growth of 9% and 7.5%, respectively, from the corresponding prior-year numbers.
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