KeyBanc Downgrades Lineage Inc (LINE) to Sector Weight

KeyBanc analyst Todd Thomas downgraded Lineage Inc (NASDAQ: LINE) from Overweight to Sector Weight.

The analyst comments: "We are lowering our recommendation on LINE to Sector Weight from Overweight based on LINE's lower overall growth outlook. First, we see more risk to LINE achieving its FY25 guidance given a more challenging operating environment, and though the Company lowered its warehouse ops outlook for 2025 last quarter (implied, as AFFO guidance was unchanged despite $0.05/sh of accretion from announced acquisitions), we see potential risk to the downside that both occupancy and pricing falls short of expectations. In addition, LINE faces significant headwinds related to interest rate swaps ($1.0B notional with SOFR swapped to a fixed rate of 0.49%) and interest rate caps ($1.5B notional that pays LINE when SOFR is >2%) that expire in December 2025 and January 2026, respectively. We expect management to implement additional interest rate hedges, though based on current pricing we estimate dilution to be in the $65M-$70M range on an annualized basis, which could represent $0.25/sh or more of AFFO."

For an analyst ratings summary and ratings history on Lineage Inc click here. For more ratings news on Lineage Inc click here.

Shares of Lineage Inc closed at $43.52 yesterday.

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