BofA cuts Lineage stock rating, price target to $49 from $70

On Tuesday, BofA Securities adjusted its stance on Lineage Inc (NASDAQ: LINE), downgrading the company’s stock rating from Buy to Neutral and slashing the price target to $49.00, a significant decrease from the previous $70.00. The stock, currently trading at $44.28, has experienced a sharp 21.6% decline over the past week. According to InvestingPro analysis, the stock’s RSI suggests oversold conditions, with the price hovering near its 52-week low of $44.00. The revision in the investment firm’s outlook is primarily driven by several factors affecting Lineage’s business operations.

The analyst at BofA Securities, Jeffrey Spector, provided insights into the rationale behind the downgrade. He cited persistent revenue growth challenges and a lag in actual results compared with occupancy estimates as primary concerns. Recent data from InvestingPro shows revenue of $5.3 billion with a slight decline of 0.6% in the last twelve months, though analysts expect 3% growth in the coming year. The analyst’s statement highlighted these ongoing issues as key contributors to the revised rating.

Moreover, Spector expressed caution regarding the company’s occupancy growth prospects. Despite management’s expectations for operational improvements in the second half of 2025, BofA Securities maintains a conservative stance on this aspect of Lineage’s business. This caution is reflected in the newly set price target, though it’s worth noting that analyst targets across Wall Street range from $49 to $92, suggesting varied opinions on the company’s potential. For deeper insights into Lineage’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks.

Another critical factor influencing the downgrade is the current behavior of producers in the market. According to the analyst, producers are pausing supply chain investments and postponing significant decisions related to expansions, plant locations, and transportation sourcing. This hesitancy is attributed to macroeconomic uncertainties, which have been exacerbated by the imposition of tariffs.

The downgrade and new price target by BofA Securities indicate a recalibration of expectations for Lineage Inc’s stock performance in light of the challenges outlined by the analyst. The firm’s cautious approach underscores the impact of broader economic factors on specific sectors and companies within the market.

In other recent news, Lineage Inc reported its first-quarter 2025 earnings, showing a mixed financial performance with earnings per share at $0.01 and revenue totaling $1.29 billion, reflecting a 3% year-over-year decline. Despite the revenue drop, Lineage maintained its 2025 financial guidance, projecting adjusted EBITDA between $1.35 billion and $1.4 billion. The company also announced significant agreements with Tyson Foods (NYSE:TSN), involving the acquisition of four cold storage warehouses for $247 million and plans to build two new automated facilities, which are expected to generate over $100 million in annual EBITDA once stabilized. Additionally, Lineage has expanded its operational footprint with the acquisition of multiple cold storage facilities. The company launched LinnOS, a new warehouse execution system, to improve productivity. Notably, analysts from firms such as Goldman Sachs and Barclays (LON:BARC) have expressed interest in these developments, suggesting a watchful eye on future performance. Despite the challenging macroeconomic environment, Lineage’s strategic initiatives and technological advancements position it for potential growth.

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