This Cold-Storage Stock Looks Like a Hot Buy Right Now

Americold, which operates food-storage warehouses, went public in 2018. (Courtesy Americold)

Shares of Americold and Lineage, real estate investment trusts, have been beaten down. One looks like the better play.

COLD

Americold Realty Trust Inc.

1-Year Price Chart

Created with Highstock 2.1.8

$12.41

as of market close October 2, 2025

Market Cap

$4.1 B

NTM P/E

9.0

Div Yield

7.4%

Beta

0.68

52 Week Range

$11.90

$27.68

Key Points

• Americold Realty Trust and Lineage stocks are down 42% and 32% respectively this year due to soft customer demand.
• Americold and Lineage offer dividend yields of 7.4% and 5.3%, with payout ratios around 65% of adjusted funds from operations.
• Both companies trade at a significant discount to the average REIT valuation, at under 10 times and 12 times 2025 AFFO respectively.

Wall Street has put cold-storage warehouse companies Americold Realty Trust and Lineage into the freezer amid soft customer demand, and that has made their stocks a cool bargain.

Americold stock, at about $12.50, is down 42% this year and trades at its lowest price since its 2018 initial public offering. Industry leader Lineage, at $40, is off 32% in 2025 and fetching about half of its IPO price of $78 in July 2024.

The two real estate investment trusts operate warehouses where frozen and fresh food is stored on its way from farms, manufacturing plants, and meatpackers to grocery stores. That includes fruits and vegetables, eggs, dairy, fish, and meat. Customers include Kraft Heinz, Perdue Farms, General Mills, and Danone.

Lineage operates almost 500 warehouses globally and controls about a third of the North American market. Americold is less than half its size and has about a 20% share in North America. The business is seasonal, as food inventories rise in the fall ahead of Thanksgiving and Christmas and then decline early in the year.

The stocks now offer ample dividends, with Lineage yielding 5.3% and Americold, 7.4%. Both dividends look safe, says Baird analyst Nicholas Thillman. Payout ratios are about 65% of adjusted funds from operations, or AFFO, a key REIT financial measure.

While both stocks look inexpensive, Americold could be the better play. It has a lower valuation, higher dividend yield, a more digestible market value, no controlling shareholder, and a CEO transition.

These factors could make it more appealing for a potential acquirer. Americold is valued at $3.5 billion against $9.2 billion for Lineage. Bay Grove, an investment firm, assembled what is now Lineage over more than a decade and holds about 70% of the stock.

Cold-storage companies were pandemic beneficiaries as Americans stayed home and prepared their own meals, stocking up pantries and freezers. Americold peaked at more than $40 in April 2021, better than three times its current price.

There has been a fallout since then. Several factors have depressed the stocks. These include new cold-storage capacity, a reversal of pandemic-era pantry stocking, lower manufacturer inventories, and the impact of GLP-1 diet drugs that have reduced food consumption.

Some Wall Street analysts recently have issued negative reports or cut earnings estimates, citing weaker trends that could persist into 2026 or possibly 2027. Both companies modestly reduced financial guidance when they released second-quarter results in August, citing the demand and pricing outlook.

The bull case is that valuations are low, long-term trends of higher meat and fresh food consumption are positive, industry capacity additions are slowing, and the companies are valued at a deep discount to replacement cost and private-market values.

“The stocks are really cheap,” says Evercore ISI analyst Steve Sakwa. He says many investors are short-term focused and avoid companies with tough current fundamentals, regardless of valuation. “Investors have little confidence in the earnings trajectory,” he says.

He says patient investors could be rewarded. He has an Outperform recommendation on Americold with an $19 price target and an Inline rating on Lineage with a $45 price target.

Cold storage involves moving heavy pallets of food, and the companies are taking a page from Amazon.com by upgrading their facilities with robots. “The amount of automation and computerization is amazing,” says Alex Goldfarb, a Piper Sandler analyst who has an Overweight rating on Lineage with a $55 price target. Goldfarb was referring to Lineage warehouses.

Both companies say their stocks are cheap.

“Americold is currently trading far below its asset value, whether you look at capitalization rates, replacement costs, or cost-per-pallet basis,” said Americold Chief Financial Officer Jay Wells on the company’s second-quarter earnings conference call in August. The stock then traded around $14, about 12% above current levels.

It was a similar refrain on the Lineage call. CEO Greg Lehmkuhl said, “We’re trading at 55% to 60% of net asset value. We think it’s obviously undervalued.” His comment also came at a higher stock price than now.

It isn’t uncommon for companies to say their stocks are cheap, but there are numbers to back up those claims for Americold and Lineage.

REITs tend to get valued based on adjusted funds from operations, a cash-flow measure. Net income is less useful since it tends to understate core profitability because of significant noncash depreciation expense.

Americold trades for under 10 times adjusted funds from operation of $1.41 a share for 2025, and Lineage for about 12 times. REITs on average command more than 20 times estimated 2025 AFFO, making the cold-storage companies some of the cheapest stocks in the entire REIT sector.

One positive sign would be if the two companies back up comments about cheap stocks by unveiling stock repurchase programs. Their shares are more financially appealing investments than new cold-storage facilities or expansion.

Both companies have sizable—and manageable—debt, with Americold carrying $3.9 billion in net debt and Lineage, $5.7 billion. Both have investment-grade bond ratings.

Among the negatives of the cold-storage companies is that they are more operational intensive than many REITs due to higher labor and electricity costs. But they provide critical infrastructure to the food industry. Anything that isn’t boxed or canned generally passes through cold-storage warehouses.

The knock on the stocks is that fundamentals now aren’t great and that imminent possible catalysts are lacking.

But cheap stocks can create their own catalysts. Lineage said on its August call that cold-storage companies traded in public markets are at a discount to cold-storage operators held by private investors. That could create incentive for big private real estate investors like Brookfield and Blackstone to look at the sector.

Cheap real estate assets like Americold and Lineage often don’t go undiscovered too long. Their share prices are likely to warm up.

Write to Andrew Bary at andrew.bary@barrons.com