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Thursday, Truist Securities maintained its Buy rating on Americold Realty Trust (NYSE:COLD) shares with a steady price target of $27.00. According to InvestingPro data, the company, with a market capitalization of $6.34 billion, is currently trading near its Fair Value while offering an attractive 4.19% dividend yield. The stock has experienced significant pressure, declining over 25% in the past six months. The endorsement followed the company’s fourth-quarter adjusted funds from operations (AFFO) per share of $0.37, which surpassed the consensus estimate of $0.36 and Truist’s own forecast of $0.35. The performance was attributed mainly to cost-saving measures implemented by the company.
The 2025 AFFO per share guidance provided by Americold Realty Trust matched the consensus estimate of $1.55 but exceeded Truist Securities’ more cautious projection of $1.52. This was primarily due to an anticipated same-store net operating income (SSNOI) growth of 4-6%, which is more optimistic than Truist’s estimate of 4%. InvestingPro analysis reveals several positive indicators, including expected net income growth this year. For deeper insights into COLD’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, which provides detailed analysis of key metrics and growth drivers. The guidance is based on an expected same-store revenue (SSREV) growth of approximately 3% and a forecast of flat occupancy rates.
Truist Securities highlighted that the underlying drivers of the guidance appear reasonable, considering the current market conditions. However, the business has seen volatility due to inflationary pressures affecting food volumes and occupancies. Despite these challenges, the firm indicated that Americold’s performance was better than expected, especially when considering the significant reduction in stock valuation levels, now at 13.5 times the projected 2025 price to AFFO ratio.
The analyst from Truist Securities, Ki Bin Kim, emphasized the difficulty in forecasting for a business that has recently experienced volatility due to external economic factors. Nevertheless, the company’s ability to meet consensus estimates and exceed Truist’s conservative expectations was seen as a positive outcome.
Americold Realty Trust specializes in temperature-controlled warehousing and logistics for the food industry, an essential service that has been subject to the pressures of inflation and changing market dynamics. The company’s latest financial results and guidance suggest a stable outlook, as reflected in the maintained Buy rating and price target by Truist Securities. InvestingPro data shows analyst targets ranging from $22 to $31.50, with the consensus recommendation leaning towards Buy. The stock currently trades at 1.77 times book value, suggesting a relatively modest valuation for this prominent player in the Industrial REITs industry.
In other recent news, Americold Realty Trust reported its fourth-quarter 2024 earnings, revealing a notable shortfall in earnings per share (EPS) against analyst expectations. The company posted an EPS of -$0.13, missing the forecasted $0.10, and revenue for the quarter was $666.4 million, slightly below the anticipated $671.91 million. Despite these misses, Americold’s stock experienced a 6.9% increase in premarket trading. For the full year 2024, the company saw a 16% increase in Adjusted Funds From Operations (AFFO) per share, reaching $1.47, indicating a strong operational performance. Americold also launched significant expansion and technology initiatives, which contributed to their improved performance metrics. Looking ahead, the company projects a 5% increase in AFFO per share for 2025, with guidance set between $1.51 and $1.59. Additionally, Americold anticipates same-store constant currency revenue growth of 2% to 4% and expects service margins to exceed 12%. These developments reflect Americold’s strategic focus and resilience in navigating current market conditions.
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