December 22, 2025 — Lamb Weston Holdings, Inc. (NYSE: LW) is having the kind of moment investors usually reserve for high-drama tech names, not a global supplier of frozen fries.
After plunging roughly 26% following its fiscal second-quarter update, LW shares were trading around $44 on Monday, Dec. 22, holding near multi-year lows as Wall Street digested a single uncomfortable message: volume is improving, but pricing power isn’t back yet. [1]
Below is a detailed, publication-ready breakdown of what’s driving Lamb Weston stock, what the company forecast for fiscal 2026, and how analysts are reacting on 12/22/2025.
What’s happening with Lamb Weston stock on Dec. 22, 2025
LW’s slide is tied to the company’s latest earnings and outlook reset. In fiscal Q2 2026, Lamb Weston beat headline expectations, but the stock sold off sharply because management signaled that profitability will stay under pressure as it uses price and trade concessions to defend and regain share—especially in a market where restaurant traffic is soft and global competition is intense. [2]
Reuters also framed the reaction plainly: by reaffirming its annual sales outlook despite a solid quarter, the company effectively implied a weaker second half than many investors expected. [3]
Lamb Weston earnings recap: Fiscal Q2 2026 key numbers
Lamb Weston reported results for the quarter ended Nov. 23, 2025. [4]
Key takeaways investors are focusing on:
- Net sales:$1.62 billion (about +1% year over year), with volume gains offset by weaker price/mix. [5]
- Net income:$62.1 million, compared with a loss of $36.1 million a year earlier. [6]
- Diluted EPS:$0.44 (vs. a prior-year loss per share of $0.25). [7]
- Adjusted diluted EPS:$0.69. [8]
- Pricing vs. volume (the heart of the story): price/mix declined roughly 8% (constant currency) while volume rose (around 8% overall), a trade-off that helps revenue but squeezes margins. [9]
Segment snapshot: North America steadier, International under heavier pressure
The company’s own tables show a stark split:
- North America segment net sales: about $1.07B, essentially flat; segment adjusted EBITDA rose to about $287.8M. [10]
- International segment net sales: about $548.6M (up ~4% reported), but segment adjusted EBITDA fell to about $27.2M. [11]
Management commentary also pointed to Europe as a pressure point, citing a strong crop alongside soft restaurant traffic and market dynamics that are pushing pricing down. [12]
Why the market punished an “earnings beat”
LW didn’t get hit because sales collapsed. It got hit because investors are trying to price the next 6–12 months, and the company essentially said:
- Discounting and customer support actions are still needed,
- Input and manufacturing costs are not fully cooperating (especially outside North America), and
- The second half may not deliver the margin rebound investors had been leaning on.
The Wall Street Journal highlighted the twin pressures of discounting to regain market share and higher international manufacturing costs, including challenges tied to operations in places such as Argentina and Europe. [13]
MarketScreener’s Dec. 22 analysis echoed the same theme: Lamb Weston is defending volumes and customer relationships, but profitability concessions are the toll it’s paying in a competitive, potentially over-supplied environment. [14]
Lamb Weston forecast: Fiscal 2026 guidance and what it implies
Company guidance (reaffirmed)
In its earnings release, Lamb Weston reaffirmed fiscal 2026 targets:
- Net sales:$6.35B to $6.55B
- Adjusted EBITDA:$1.00B to $1.20B
- Capex: approximately $500M [15]
Reuters noted that the midpoint of the sales range sits below the analyst estimate cited in its report, reinforcing why investors read the reaffirmation as cautious. [16]
Management’s own second-half margin outlook is the red flag
In prepared remarks, management went further and laid out the near-term pain points:
- Adjusted gross margin in the second half expected to be flat to down vs. the first half (the first half was cited at 20.4%) due to price/mix dynamics and higher international manufacturing costs. [17]
- Continued headwinds internationally from softer restaurant traffic, added capacity, and a strong crop. [18]
- The company said maintaining the $1.0B–$1.2B adjusted EBITDA range is “prudent,” and it currently expects to finish closer to the midpoint. [19]
That’s the crux: investors didn’t just hear “guidance reaffirmed.” They heard “guidance reaffirmed, but margins still strained.”
Analyst price targets and ratings: what changed on 12/22/2025
Early on Dec. 22, two notable analyst updates hit the tape via MT Newswires:
- JPMorgan cut its price target to $50 from $62 and kept a Neutral rating. [20]
- Stifel cut its price target to $50 from $63 and kept a Hold rating. [21]
Despite those cuts, broader consensus data still points to targets well above the post-drop trading range:
- MarketWatch’s analyst page listed an average target price of about $62.80 with an Overweight average recommendation (as shown on the page). [22]
- MarketBeat showed a consensus/average target in the low-to-mid $60s, with the low end of published targets around $50 and highs around $70. [23]
In other words: analysts are trimming targets, but many still model a meaningful rebound—if margins stabilize and price/mix stops bleeding.
Cash flow, buybacks, dividend: the “support beams” under the story
Even as margins wobble, Lamb Weston is leaning hard into cash discipline and shareholder returns.
From the earnings release and management remarks:
- Q2 capital returns: about $51.6M in dividends and $39.6M in buybacks (617,623 shares at an average of $64.18), with about $308M remaining under authorization. [24]
- Dividend increase: the board approved a 3% increase to $0.38/share, payable Feb. 27, 2026 to holders of record Jan. 30, 2026. [25]
- Liquidity and leverage: management cited roughly $1.43B of liquidity, net debt of $3.8B, and an adjusted EBITDA-to-net-debt leverage ratio of about 3.1x (trailing 12 months). [26]
- First-half cash generation: about $530M cash from operations and $375M free cash flow. [27]
This matters because, in a margin squeeze, the market tends to trust the numbers you can’t easily “storytell” your way around—cash flow and balance sheet capacity.
The key risks now hanging over LW stock
Think of Lamb Weston’s investment debate as a tug-of-war between operational traction and profitability erosion.
1) Pricing and mix
Management expects price/mix to remain unfavorable (though less so than the first half), and also called out mix shifts toward lower-margin business as a continuing factor. [28]
2) International cost pressure (Europe + Argentina ramp)
The company explicitly linked margin pressure to higher manufacturing costs internationally, including Argentina ramp-up costs and underutilization in Europe as it works to rebalance supply and demand. [29]
3) Restaurant traffic sensitivity
Both Reuters and management remarks pointed to softer traffic dynamics—especially outside the U.S.—as an ongoing headwind. [30]
4) Tariffs and commodity inputs beyond potatoes
Management noted that input costs outside raw potato prices rose due to factors including tariffs, and specifically referenced uncertainty around palm oil tariff exemptions not yet finalized. [31]
What investors should watch next
For LW stock, the next chapter isn’t about whether consumers will keep eating fries. It’s about whether Lamb Weston can regain/hold share without permanently “discounting away” its margin structure.
A few signposts to monitor:
- Contracting and pricing cadence: management said it ended Q2 with 90%+ of open contracted volume negotiations concluded and expects to complete negotiations on most major chain contracts by the end of calendar 2025. [32]
- Second-half gross margin trend: management guided second-half gross margin flat to down vs. first half. Any improvement here is likely to move the stock. [33]
- International stabilization: especially Europe pricing pressure and Argentina ramp efficiency. [34]
- Cost savings execution: the market has already heard the plan—what it wants now is proof in quarterly margins and EBITDA. [35]
Bottom line on Lamb Weston stock as of Dec. 22, 2025
As of 12/22/2025, Lamb Weston stock is being priced like a company in a margin fight, not a growth story. The company is showing volume resilience and solid cash generation, but the market is laser-focused on price/mix declines, international cost pressure, and what appears to be a tougher second half embedded in the reaffirmed outlook. [36]
The analyst response on Dec. 22—especially the twin $50 price targets from JPMorgan and Stifel—signals that Wall Street is recalibrating expectations while it waits for evidence that the pricing environment is stabilizing. [37]
References
1. www.barrons.com, 2. www.wsj.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. investors.lambweston.com, 7. investors.lambweston.com, 8. investors.lambweston.com, 9. investors.lambweston.com, 10. investors.lambweston.com, 11. investors.lambweston.com, 12. investors.lambweston.com, 13. www.wsj.com, 14. www.marketscreener.com, 15. investors.lambweston.com, 16. www.reuters.com, 17. investors.lambweston.com, 18. investors.lambweston.com, 19. investors.lambweston.com, 20. www.marketscreener.com, 21. www.marketscreener.com, 22. www.marketwatch.com, 23. www.marketbeat.com, 24. investors.lambweston.com, 25. investors.lambweston.com, 26. investors.lambweston.com, 27. investors.lambweston.com, 28. investors.lambweston.com, 29. investors.lambweston.com, 30. www.reuters.com, 31. investors.lambweston.com, 32. investors.lambweston.com, 33. investors.lambweston.com, 34. investors.lambweston.com, 35. www.barrons.com, 36. www.reuters.com, 37. www.marketscreener.com
