by Ian Harvey
January 06, 2020
Lamb Weston soared nearly 12% to $94.14 after strong sales and earnings growth helped the frozen potato supplier beat Wall Street's fiscal second-quarter earnings expectations.
“Earnings Predictions Members,” using a call option make potential profits of 301%!
Where to now for LW?
Shares of LW shot up toward a record high last Friday, after the frozen potato and vegetable products supplier to restaurants and retailers reported fiscal second-quarter earnings that beat expectations and raised his full-year outlook.
The Eagle, Idaho-based company reported net income of $140.4 million, or 95 cents a share, up from $119.0 million, or 74 cents a share, a year ago. Adjusted earnings came to 95 cents, up from 80 cents, and beat the consensus of 84 cents.
Sales totaled $1.02 billion, up 12% from a year ago, and topped the consensus of $962.7 million. The increase was primarily driven by growth in the company’s global and foodservice segments.
“In the second quarter, we delivered strong sales, volume and earnings growth across each of our core business segments by continuing to execute well across the organization,” said Tom Werner, president and CEO. “We’re generating strong cash flow, and we’re investing that cash back into the business to support customer growth, improve manufacturing operations and systems, and bolster our presence in key markets such as Australia and South America. We’re also returning more cash to shareholders, including recently raising our quarterly dividend by 15%.”
Management is encouraged with its quarterly
results, which indicates consistent growth in segments. The upside can be
attributed togains from improved volumes and price/mix. Going ahead, management
expects the operating environment to remain favorable and aid meeting set
Moreover, management raised its net sales and adjusted EBITDA outlook for fiscal 2020.
YOU NEED TO BE IN TO PROFIT!
Here is the recommended trade on Lamb Weston…..given December 30, 2019…..
Lamb Weston Holdings Inc (NYSE:LW), a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers around the world, will report earnings before the market opens. Lamb Weston is expected to post quarterly earnings of $0.85 per share in its upcoming report, which represents a year-over-year change of +6.3%.
Revenues are expected to be $964.39 million, up 5.8% from the year-ago quarter.
For the last reported quarter, it was expected that Lamb Weston would post earnings of $0.80 per share when it actually produced earnings of $0.79, delivering a surprise of -1.25%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Lamb Weston has been assigned a consensus recommendation of “Buy” from the eleven analysts that are covering the stock. Three analysts have rated the stock with a hold recommendation and seven have assigned a buy recommendation to the company. The average 12 month price objective among brokers that have covered the stock in the last year is $75.71.
Option trade to consider: Buy the LW FEB 21 2020 90.000 CALL at approximately $1.30.
Profiting from the recommended trade on Lamb Weston…..
Earnings Prediction Members were able to enter the trade at approximately $1.30; and exit when the call option hit $5.90 – allowing for 301% potential profit!
For fiscal 2020, Lamb Weston raised its growth guidance to the high end of mid-single digit percentage range from the mid-single digit range, largely driven by volume as well as modestly higher price-mix.
Werner said that "while overall raw potato supply in and is tight due to relatively poor weather late in the growing season and during the harvest, we expect to have enough raw potatoes to support our volume growth targets for the year."
Join us today and see what future trades will be recommended!
The questions remain......Will Lamb Weston shares continue to perform from here?
Will we recommend another options trade on Lamb Weston?
What will “Stock Options Made Easy” advise members to do?
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!