Lineage Set For Strong Growth Post-2024 With Tech Investments And Strategic Acquisitions: Analyst

Lineage, Inc. LINE shares are trading higher today after multiple firms initiated coverage on the stock with bullish ratings.

JPMorgan analyst Michael W. Mueller initiated coverage on the stock with an Overweight rating and a price target of $93.

The analyst writes that currently Lineage’s cold storage business faces challenges, with expected flattish 2024 same-store NOI growth due to throughput and occupancy issues. However, improved trends are anticipated for 2025/2026.

The company is heavily investing in technology to drive long-term growth and remains highly acquisitive, with its strong equity valuation potentially fueling further acquisitions, adds the analyst.

Given Lineage’s strong acquisition track record and equity valuation, increased acquisition activity could be a major area where the company exceeds the analysts’ initial forecasts.

Mueller forecast Lineage’s defined AFFO at $3.16 per share for 2024, $3.68 for 2025, and $3.93 for 2026. For JPM-defined AFFO, which includes fewer non-cash add-backs, the analyst forecasts $2.89 per share for 2024, $3.27 for 2025, and $3.44 for 2026.

BofA Securities analyst Joshua Dennerlein initiated with a Buy rating and a price target of $100. LINE’s primary advantage over competitors is its superior operating platform, says the analyst.

The analyst writes that, by leveraging technology to optimize task allocation and warehouse needs, LINE has invested over $750 million in developing and acquiring proprietary systems and third-party platforms since 2019, along with $380 million in IT systems. These investments are expected to yield significant economic benefits in the future.

The analyst expects LINE to achieve high-single-digit AFFO and EBITDA growth through 2028, with projected adjusted EBITDA growth of 6.6% for 2025 and 11.8% for 2026. Also, for AFFO per share, Dennerlein anticipates growth of 9.8% in 2025 and 9.1% in 2026.

Truist Securities analyst Ki Bin Kim started covering the stock with a Buy rating and a price target of $94.00. The analyst expects its competitive edge and market position to strengthen over time.

Kim anticipates the potential for mid to high-single-digit SSNOI growth as the food sector rebounds from the recent inventory downturn, driven by LINE’s leading platform.

The analyst sets the 2024 AFFO per share estimate at $3.38, reflecting a -3% YoY growth, and the 2025 estimate at $3.70, indicating a +10% YoY growth.

Price Action: LINE shares are up 3.19% at $86.65 at the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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