Americold Realty (COLD) has received a new Hold rating, initiated by UBS analyst, Michael Goldsmith.
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Michael Goldsmith has given his Hold rating due to a combination of factors affecting Americold Realty. The current market conditions, characterized by supply and demand challenges, are expected to limit growth opportunities for the company. Inflation, tariffs, and high food prices are contributing to subdued inventory levels, which are likely to keep Cold Storage occupancy under pressure until 2026. Additionally, competitive pricing strategies in the market are creating price discounting, although Americold’s fixed guarantee structure and focus on single-occupant facilities may help stabilize revenue trends.
Despite these challenges, there is limited visibility into significant improvements in demand and pricing conditions. The proprietary Cold Storage rent growth model forecasts continued pressure on rent growth, with negative growth anticipated through 2026. While there are potential catalysts for positive performance, such as improvements in food pricing and USDA inventory levels, risks remain due to consumer pressure, tenant inventory rationalization, and excess supply. The valuation reflects a balanced risk/reward scenario, with the market factoring in a slow recovery pace.
In another report released on October 10, Wells Fargo also maintained a Hold rating on the stock with a $15.00 price target.