Evercore ISI cuts Americold Realty Trust target to $25

On Thursday, Evercore ISI adjusted its price target on Americold Realty Trust (NYSE:COLD) shares to $25 from the previous target of $28, while maintaining an Outperform rating on the company’s stock. The adjustment follows Americold’s first-quarter Adjusted Funds From Operations (AFFO) report, which showed a $0.34 result, slightly above Evercore ISI’s estimate of $0.32 and in line with the consensus. The company, currently valued at approximately $5 billion market cap, trades at 1.5x book value and offers a notable 5% dividend yield. According to InvestingPro analysis, Americold appears undervalued based on its Fair Value estimate, with additional ProTips highlighting its position as a prominent player in the Industrial REITs industry.

Despite revenues falling short of expectations, Americold’s effective cost management and efficiency improvements led to a performance that surpassed Evercore ISI’s projections. The company saw a Same-Store Net Operating Income (SS NOI) decline of 4.2%, which was better than the anticipated 5.0% decrease. Additionally, reduced General and Administrative expenses (G&A) contributed to the first-quarter earnings beat.

However, Americold has revised its full-year 2025 AFFO guidance downward by $0.08, or 5% at the midpoint, now expecting $1.42 to $1.52, compared to the previous forecast of $1.51 to $1.59. This revision is largely attributed to the uncertain macroeconomic environment and its potential impact on the company’s revenues. The new projections include a Same-Store (SS) revenue growth of 0% to 2.0% on a constant currency basis, a downward revision from the 2.0% to 4.0% range initially expected. Occupancy rates are also anticipated to decrease by 100 basis points at the midpoint, and throughput volumes are expected to remain flat.

Americold’s tempered pricing expectations for rent/storage and service components are in response to negative pricing trends observed among competitors. Evercore ISI has therefore adjusted its economic occupancy forecast for 2025 to reflect a 250 basis point decline from their previous estimate of a 70 basis point decrease. They also anticipate throughput volume to decline by 60 basis points year-over-year, revising from an earlier assumption of a 10 basis point increase.

In light of these factors and the current industry pricing dynamics, Evercore ISI has lowered its 2025 AFFO estimate for Americold from $1.54 to $1.40 and the 2026 estimate from $1.67 to $1.44. The firm cites the need for consumer confidence to improve and the economic outlook to become more positive before a clearer picture of top-line growth emerges. InvestingPro analysis shows strong analyst support with a consensus recommendation of 1.67 (Buy), with price targets ranging from $20 to $31. While not profitable over the last twelve months, analysts expect the company to return to profitability this year, with projected earnings per share of $0.20 for 2025.

In other recent news, Americold Realty Trust reported disappointing first-quarter 2025 earnings, missing market expectations. The company announced an earnings per share (EPS) of -$0.06, significantly below the forecasted $0.05, and revenue of $628.98 million, falling short of the anticipated $667.18 million. Despite these setbacks, Americold increased its quarterly dividend by 5% to $0.23 per share. The company has revised its full-year 2025 AFFO per share guidance to a range of $1.42-$1.52. Americold is focusing on strategic partnerships and facility expansions to drive future growth, including projects in Canada and New Zealand. Analysts from Bank of America and Truist Securities highlighted the impact of tariffs and consumer confidence on Americold’s performance. The company is also strategically exiting five facilities to optimize operations. Despite the challenges, Americold remains committed to maintaining pricing discipline and operational excellence.

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