Several firms, including Goldman Sachs and Bank of America, initiated coverage of Lineage just a few weeks after the cold storage real estate investment trust went public in late July. Lineage went public on July 25 via an initial public offering, which was the largest IPO of the year . The company — the world's largest global temperature-controlled warehouse REIT — raised $4.
4 billion at an implied valuation above $18 billion. Lineage operates more than 480 locations across North America, Europe and Asia that are used to store food across customer companies' supply chains. Goldman, Morgan Stanley, Bank of America, JPMorgan and Wells Fargo were the joint lead book-running managers on the IPO.
Goldman analyst Caitlin Burrows initiated coverage of Lineage with a buy rating and the most bullish price target among major firms, at $105, which implies about 25% potential upside from Friday's close. The company's shares are down roughly 1% so far this month, but added 3% on Monday. "The primary drivers of growth in the cold storage industry are how much food is consumed overall, and what kinds of food consumers prefer.
We believe LINE's own scale, market share, locations, and property quality will allow it to have some pricing power, driving revenue growth," Burrows said in a Monday note to clients. "More importantly, on the cost side, we expect management will minimize labor costs (i.e.
, their largest cost) through automation and power costs through data analytics and solar pow.