Dubai Expansion And Asia Pacific Demand Will Boost Cold Storage

Key Takeaways

• Expanding global presence, automation investments, and long-term contracts position Americold to benefit from rising food logistics demand and recurring, stable revenue streams.
  
• High barriers to entry, strong partnerships, and disciplined portfolio management support operational efficiency, margin expansion, and future earnings growth.
  
• Ongoing demand headwinds, internalization by customers, and rising costs threaten occupancy, pricing power, and long-term profitability amid heightened competition and uncertain macro trends.

Catalysts

Americold is a global leader in temperature-controlled logistics real estate and value-added services.

• Ongoing global growth in food consumption and rising population-combined with Americold's expanding international footprint and new facility openings in high-demand regions (such as Allentown, Dubai, and Asia Pacific)-positions the company to benefit from increasing demand for temperature-controlled storage, supporting higher occupancy and long-term revenue growth as macro headwinds abate.
  
• The accelerating shift toward e-commerce grocery and direct-to-consumer food delivery continues to drive sustained, structural demand for complex cold-storage logistics and rapid fulfillment, aligning with Americold's investments in automation, specialized services, and high-turn retail/QSR business, enabling them to capture both greater market share and higher-margin revenue growth.
  
• Heightened industry focus on food safety, regulatory compliance, and supply chain transparency leads food producers and grocers to prefer established, proven cold-storage partners; Americold's strong contractual relationships, best-in-class service reputation, and high percentage (60%) of multiyear fixed-commit contracts provide lease stability and predictable, recurring cash flows.
  
• Barriers to entry in cold storage-such as high capital intensity, know-how, and regulatory requirements-restrict new competitors, favoring Americold's scale advantages; ongoing investment in technology and partnerships (e.g., CPKC, DP World) enhance operating efficiencies and support improving net margins and future earnings growth potential.
  
• Strategic focus on customer-dedicated expansions, stable international markets (with 90%+ occupancy), and disposition of non-core assets enables Americold to redeploy capital into higher-return projects, optimize its portfolio, deleverage, and ultimately drive long-term NOI and AFFO per share growth as industry cycles recover.

Americold Realty Trust Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Americold Realty Trust's revenue will grow by 5.6% annually over the next 3 years.
• Analysts assume that profit margins will increase from -2.1% today to 3.0% in 3 years time.
• Analysts expect earnings to reach $92.8 million (and earnings per share of $0.2) by about September 2028, up from $-54.8 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $128 million in earnings, and the most bearish expecting $-14.0 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 82.1x on those 2028 earnings, up from -72.2x today. This future PE is greater than the current PE for the US Industrial REITs industry at 27.2x.
• Analysts expect the number of shares outstanding to grow by 0.19% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.78%, as per the Simply Wall St company report.

Americold Realty Trust Future Earnings Per Share Growth

Risks

• Persistent demand headwinds-including high interest rates, tariffs, inflation, government benefit reductions, and excess cold storage capacity-are combining to suppress both occupancy and pricing, creating sustained pressure on revenue growth and potentially limiting earnings expansion.
  
• Increasing customer tendency to utilize their own cold storage infrastructure and delay inventory restocking minimizes dependency on third-party providers like Americold, which could further weaken occupancy rates and slow warehouse revenue recovery.
  
• Elevated capital expenditures related to large-scale development projects, automation, and global expansion have increased leverage (net debt at $3.9 billion and net debt/EBITDA at 6.3x), exposing the company to higher interest expense and potentially pressuring net margins and earnings if revenue growth does not accelerate.
  
• Intensifying competition, particularly with some market participants engaging in "irrational" pricing and the ongoing risk that major food producers and retailers might internalize their cold-chain logistics, threatens Americold's market share, pricing power, and long-term revenue stability.
  
• The lack of typical seasonal inventory builds and ongoing uncertainty in macroeconomic trends mean occupancy and throughput levels could remain muted for several quarters; if macro headwinds persist or food preservation technology advances, long-term financial outcomes such as revenue, margins, and AFFO per share could be negatively affected.

Valuation

• The analysts have a consensus price target of $20.133 for Americold Realty Trust based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $27.0, and the most bearish reporting a price target of just $15.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.1 billion, earnings will come to $92.8 million, and it would be trading on a PE ratio of 82.1x, assuming you use a discount rate of 9.8%.
• Given the current share price of $13.88, the analyst price target of $20.13 is 31.1% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.