Lamb Weston downgraded to Neutral from Buy at Citi

Citi analyst Thomas Palmer downgraded Lamb Weston (LW) to Neutral from Buy with a price target of $68, down from $90. The were down 20% yesterday, following a fiscal Q2 earnings miss, fiscal 2025 guidance cut, and announced CEO departure, the analyst tells investors in a research note. The firm says that while Lamb has opportunity to drive profit higher over the next couple of years through volume growth and operational improvements, “the starting point for this recovery is much lower than we previously anticipated.” Citi believes the pace of the company’s recovery could be limited by price competition, due a combination of “sub-optimal” utilization rates in the French fry industry, below average demand growth, and ongoing potato processing capacity additions.