Lamb Weston upgraded to Buy with 15% upside amid margin pressures and improving outlook.

Lamb Weston shares have dropped about 20% over the past year due to margin pressures from consumer trade-downs, weak overseas demand, and negative mix shifts. However, the company is expected to see improvement later this year supported by lower potato costs. Free cash flow for fiscal 2024 is forecasted between $300 million and $375 million, with a secure 3.6% dividend yield and reduced capital expenditures. Despite ongoing overseas risks, current results may represent a low point, and potential M&A interest could arise if shares fall further, leading to an upgrade to a Buy rating with approximately 15% upside from current levels.