Bernstein SocGen Group lowered its price target on Lamb Weston (NYSE: LW) to $46 from $65 while maintaining a Market Perform rating, sending shares down more than 1% intra-day on Monday.

The firm said Lamb Weston's fiscal second-quarter 2026 results exceeded expectations, but maintaining full-year FY26 guidance implied a sharp deterioration in profitability during the second half. At the midpoint of guidance, Bernstein estimated second-half sales would decline approximately 0.7%, broadly in line with current trends.

However, the analyst said investor concern stemmed from EBITDA guidance, which implied a 21.2% decline in second-half EBITDA after being relatively flat earlier in FY26. This figure was roughly 14% below consensus expectations and raised questions about earnings sustainability heading into fiscal 2027.

While Bernstein acknowledged the company's success in retaining and adding large customers internationally, it questioned the profitability of those wins and said it preferred to remain on the sidelines given uncertainty around margins and forward earnings power.