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 power." Burrows said she expects Lineage's earnings growth to be driven by a reacceleration in same-store net operating income growth due to increased demand and a return to more normal seasonality over 2025 and 2026. A "roll-up opportunity" exists for Lineage, if the company completes further acquisitions or new development starts, she added.
Lineage had acquired eight facilities from Burris Logistics in October 2023 . JPMorgan analyst Michael Mueller thinks Lineage's core growth looks muted this year but that it could ramp up over the next couple of years. He initiated the stock with an overweight rating and a $93 price target, suggesting shares could add 10.
7%. Morgan Stanley and Bank of America, meanwhile, each began coverage of the REIT with a $100 price objective. That implies roughly 19.
1% potential upside. Morgan Stanley began coverage with an overweight rating and named Lineage its "new top pick," citing confidence in the company's global footprint and its track record as a strong buyer in a fragmented cold storage industry. "LINE is the global leader in the temperature-controlled warehouse space with the highest quality assets and a differentiated tech-enabled platform to drive efficiencies & margins," Morgan Stanley analyst Ronald Kamdem said.
"We see a compelling entry point near the end of a destocking cycle; acquisitions track record supports potential upside." Bank of America analyst Joshua Dennerlein, who has a buy rating on shares, thinks Lineage will produce adjusted funds from operations and earnings before interest, taxes, depreciation and amortization growth in the high single digits through 2028..
