KeyBanc starts Lineage Inc at Overweight, sets $92 target By Investing.com

On Monday, KeyBanc Capital Markets initiated coverage on shares of Lineage Inc (NASDAQ:LINE), assigning an Overweight rating and establishing a price target of $92. Lineage Inc, recognized for operating the world’s largest global portfolio of temperature-controlled warehouses, has a significant presence with 482 warehouses spanning North America, Europe, and Asia-Pacific.

The company’s successful initial public offering (IPO), which exceeded its original size by 21% plus the full exercise of the overallotment option, has positioned it with lower leverage and substantial funds for future investments.

The analyst from KeyBanc highlighted several factors that could drive Lineage’s earnings growth in the coming quarters. These include the potential for an investment grade rating and subsequent access to the public bond market.

This move could provide Lineage with more attractively priced debt capital, allowing the company to reduce costs on over $2 billion of variable rate debt by approximately 150 basis points or more. Additionally, a resurgence in accretive capital deployment is anticipated, which could result in greater earnings and net asset value accretion than previously expected.

KeyBanc also pointed to possible index inclusions as a factor that could sustain demand from index and passive investors over the next one to two years. This demand is expected to continue while the operating environment reaches stability.

Once the operating environment stabilizes, Lineage is projected to be in a strong position to enhance margins and net operating income across its Global Warehouse and GIS segments. According to KeyBanc, these improvements should translate into favorable growth in net operating income and adjusted funds from operations for the company.

In other recent news, Lineage Inc has been the focus of several analyst firms, each providing their own ratings and price targets. Scotiabank initiated coverage on Lineage with a Sector Outperform rating and a price target of $95.00, highlighting the company’s potential to outperform within its sector and its projected 11% compound annual growth rate in adjusted funds from operations from 2023 to 2026. Truist Securities began its coverage of Lineage shares with a Buy rating and a price target of $94.00, emphasizing the company’s strong growth profile and aggressive expansion strategy.

On the other hand, UBS initiated coverage on Lineage shares with a Neutral rating and a price target of $88.00, suggesting that the potential acceleration in Lineage’s operating metrics and growth anticipated in 2025 is already reflected in the current stock price.

Wells Fargo began coverage on Lineage shares with an Equal Weight rating and a price target of $86.00, based on the firm’s analysis of Lineage’s fiscal year 2025 and 2026 adjusted funds from operations estimates.

Lastly, Mizuho initiated coverage on Lineage with a Neutral rating and a price target of $86.00, recognizing the company’s significant scale and advanced technology utilization.

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