Lamb Weston Holdings (Lamb Weston Holdings) Intrinsic Value: DCF (Dividends Based) : $62.41 (As of Apr. 27, 2024)

View and export this data going back to 2016. Start your Free Trial

What is Lamb Weston Holdings Intrinsic Value: DCF (Dividends Based)?

As of today (2024-04-27), Lamb Weston Holdings's intrinsic value calculated from the Discounted Dividend model is $62.41.

Note: Discounted Dividend model is only suitable for companies who have a consistant distribution history. If the company's dividends does not remain steady over a long period, results may not be accurate due to the low consistency. The model is also only suitable for predictable companies (Business Predictability Rank higher than 1-Star) with dividend payments. If the company's Predictability Rank is 1-Star or Not Rated, or if the company does not pay dividend, the data will not be stored into our database.

Lamb Weston Holdings's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety % (DCF Dividends Based) using Discounted Dividend Model for Lamb Weston Holdings is -34.35%.

The historical rank and industry rank for Lamb Weston Holdings's Intrinsic Value: DCF (Dividends Based) or its related term are showing as below:

LW's Price-to-DCF (Dividends Based) is not ranked ^*
in the Consumer Packaged Goods industry.
Industry Median: 1.09
* Ranked among companies with meaningful Price-to-DCF (Dividends Based) only.

Lamb Weston Holdings Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for Lamb Weston Holdings's Intrinsic Value: DCF (Dividends Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Lamb Weston Holdings Intrinsic Value: DCF (Dividends Based) Chart

Lamb Weston Holdings Annual Data

Trend

May14

May15

May16

May17

May18

May19

May20

May21

May22

May23

Intrinsic Value: DCF (Dividends Based)

Get a 7-Day Free Trial

Lamb Weston Holdings Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
Intrinsic Value: DCF (Dividends Based)	Get a 7-Day Free Trial															-	-	-	-	-

Competitive Comparison of Lamb Weston Holdings's Intrinsic Value: DCF (Dividends Based)

For the Packaged Foods subindustry, Lamb Weston Holdings's Price-to-DCF (Dividends Based), along with its competitors' market caps and Price-to-DCF (Dividends Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Lamb Weston Holdings's Price-to-DCF (Dividends Based) Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Lamb Weston Holdings's Price-to-DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where Lamb Weston Holdings's Price-to-DCF (Dividends Based) falls into.

Lamb Weston Holdings Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. The calculation method is the same as Discounted Cash Flow model except adjusted dividend are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 6.90%
The Growth Rate in the growth stage is initially set as the default 10-Year Dividend Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year Dividend Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year Dividend Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Lamb Weston Holdings's average Dividend Growth Rate in the past 5 years was 6.90%, which is between 5% and 20%. => GuruFocus defaults => Growth Rate: 6.90%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: adjusted dividends per share = $4.779.
GuruFocus uses adjusted dividends per share by default to ensure that the valuation reflects the total value of the company, as the actual dividend is only a portion of the total value.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

Lamb Weston Holdings's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

Intrinsic Value: DCF (Dividends Based)	=	Dividends per Share	*	{[(1+g1)/(1+d)	+	(1+g1)^2/(1+d)^2	+	...	+	(1+g1)^10/(1+d)^10]
	+	(1+g1)^10/(1+d)^10	*	[(1+g2)/(1+d)	+	(1+g2)^2/(1+d)^2	+	...	+	(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.069)/(1+0.11) = 0.96306306306306
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Dividends Based)

Dividends per Share

{[x

x^2

...

x^10]

x^10

y^2

...

y^10]}

Dividends per Share

(1-x^10)

(1-x)

x^10

(1-y^10)

(1-y)]

4.779

13.059

62.41

Margin of Safety % (DCF Dividends Based)	=	(Intrinsic Value: DCF (Dividends Based)	-	Current Price)	/	Intrinsic Value: DCF (Dividends Based)
	=	(62.41	-	83.85)	/	62.41
	=	-34.35 %

Lamb Weston Holdings (NYSE:LW) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.

Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

Lamb Weston Holdings Intrinsic Value: DCF (Dividends Based) Related Terms

Thank you for viewing the detailed overview of Lamb Weston Holdings's Intrinsic Value: DCF (Dividends Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Lamb Weston Holdings (Lamb Weston Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Lamb Weston Holdings Inc (NYSE:LW) » Definitions » Intrinsic Value: DCF (Dividends Based)

Comparable Companies

Traded in Other Exchanges

0L5:Germany 0L5:Germany L1WH34:Brazil

Address

599 S. Rivershore Lane, Eagle, ID, USA, 83616

Website

https://www.lambweston.com

Lamb Weston is North America's largest and the world's second-largest producer of branded and private-label frozen potato products, both by volume and value. The company's portfolio is anchored by French fries, but it also sells sweet potato fries, tater tots, diced potatoes, mashed potatoes, hash browns, and chips. Nearly 70% of revenue comes from its home market of North America, with none of the other 100 countries the company sells into representing a significant share. McDonald's is Lamb Weston's single largest customer at 13% of fiscal 2023 sales, with no other company representing more than 10%. Lamb Weston became an independent company in 2016 when it was spun off from Conagra.

Executives

William G Jurgensen	director
Eryk J Spytek	officer: See Remarks	599 S. RIVERSHORE LANE, EAGLE ID 83616
Rita Fisher	director	1900 W. FIELD COURT, LAKE FOREST IL 60045
Sukshma Rajagopalan	officer: Chief Info and Digital Officer	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616
Marc Schroeder	officer: President, International	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616
Sharon L. Miller	officer: Senior Vice President	599 S. RIVERSHORE LANE, EAGLE ID 83616
Gregory W Jones	officer: Vice President and Controller	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616
Bernadette M Madarieta	officer: Vice President and Controller	599 S. RIVERSHORE LANE, EAGLE ID 83616
Michael Jared Smith	officer: SVP, Growth & Strategy	599 S. RIVERSHORE LANE, EAGLE ID 83616
Gerardo Scheufler	officer: SVP, Chief Supply Chain Off	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616
Steven J Younes	officer: CHIEF HUMAN RESOURCES OFFICER	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616
John C Hatto	officer: Senior Vice President	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616
Robert A Niblock	director	1605 CURTIS BRIDGE ROAD, WILKESBORO NC 28697
Peter J Bensen	director	MCDONALD'S CORPORATION, 2915 JORIE BOULEVARD, OAK BROOK IL 60523
Thomas P. Werner	director, officer: President	C/O LAMB WESTON HOLDINGS, INC., 599 S. RIVERSHORE LANE, EAGLE ID 83616