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On Tuesday, Raymond (NSE:RYMD) James made adjustments to the financial outlook for Americold Realty Trust (NYSE: NYSE:COLD), reducing the price target to $25 from the previous $27 while maintaining an Outperform rating on the stock. Currently trading at $17.83, with a market capitalization of $5.08 billion, InvestingPro analysis suggests the stock is currently undervalued. The adjustment comes after Americold’s first quarter results for 2025 met expectations, but the company’s guidance for the remainder of the year was revised downward. This change in guidance is attributed to anticipated weaker inventory builds in the second half of 2025, driven by a decrease in end-consumer demand.
The temperature-controlled warehousing sector, in which Americold operates, is expected to experience a shift in supply and demand dynamics later in the year, similar to the broader industrial sector. As a prominent player in the Industrial REITs industry, the company maintains a solid dividend yield of 5.16% and generated $567.38 million in EBITDA over the last twelve months. However, the timing of this shift has been delayed, and predictions regarding a rebound in consumer demand remain challenging. The updated forecast for 2025 now suggests a more subdued improvement in inventory builds. Despite this, the company is expected to benefit in the latter half of the year from typical seasonal trends and comparisons to a weaker prior period. InvestingPro subscribers can access 6 additional key insights about Americold’s market position and financial health.
Americold is poised for growth, with expectations of increased occupancy and earnings as the year progresses. This outlook is supported by the company’s unique efficiency and productivity initiatives, which are likely to result in mid-single-digit net operating income (NOI) growth in the current and following year. Additionally, Raymond James highlights Americold’s compelling valuation, both in absolute terms and relative to its peers. Analyst targets range from $20 to $31 per share, reflecting significant upside potential. Moreover, the company is projected to exhibit solid adjusted funds from operations (AFFO) growth through 2026, with an estimated compound annual growth rate (CAGR) of 5%. For detailed valuation metrics and comprehensive analysis, investors can access the full Pro Research Report available on InvestingPro.
The analyst’s comments underscore the belief that Americold’s operational leverage, with a mid-30% NOI margin, will be a key driver of its financial performance. Despite the near-term headwinds, the firm remains constructive on Americold’s prospects, emphasizing the company’s potential for sustained growth in the coming years. This aligns with InvestingPro data showing expected net income growth this year and analysts’ predictions of profitability in 2025.
In other recent news, Americold Realty Trust faced a challenging first quarter in 2025, reporting earnings per share of -$0.06, which fell short of the forecasted $0.05. The company’s revenue of $628.98 million also missed the expected $667.18 million, raising concerns among investors. Despite these results, Americold Realty Trust increased its quarterly dividend by 5% to $0.23 per share. The company has adjusted its full-year 2025 Adjusted Funds From Operations (AFFO) guidance to a range of $1.42 to $1.52 per share, down from a previous forecast of $1.51 to $1.59. This revision reflects the uncertain macroeconomic environment and potential impacts on revenue. Evercore ISI responded by lowering its price target for Americold Realty Trust from $28 to $25, while maintaining an Outperform rating. The firm also adjusted its 2025 AFFO estimate for Americold to $1.40, citing industry pricing dynamics and economic conditions. Despite these challenges, Americold remains focused on strategic partnerships and new facility launches to drive future growth.
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