On Friday, Americold Realty Trust (NYSE:COLD) experienced a change in its stock outlook as KeyBanc adjusted its price target for the company. The new price target is set at $32.00, a decrease from the previous $37.00, while the Overweight rating remains unchanged. This adjustment comes as the firm revises its 2024 and 2025 adjusted funds from operations (AFFO) estimates downward by 5% and 4%, respectively.
Americold Realty Trust has faced a challenging operating environment, which has impacted its execution. This has contributed to the company's stock declining by 16.7% year-to-date, underperforming compared to Industrial REITs and RMS by significant margins of 1,400 basis points and 1,530 basis points, respectively. Despite the negative sentiment surrounding the stock, analysts at KeyBanc maintain an optimistic outlook, expecting that fundamentals might improve over the year.
The potential for improvement is linked to anticipated growth in cash flow, which is expected to be supported by an expansion in warehouse service margins and the stabilization of developments and non-same store assets. However, the precise timing for a noticeable improvement in fundamentals is still uncertain, and the lack of visibility is acknowledged as a factor that adds to the risk in the near term for Americold Realty Trust.
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