Lineage, Inc. (LINE): what the price assumes

In the published model solve dated 2026-Q2, anchored at $41.11, Lineage, Inc. (LINE) is priced for +2.7% AFFO growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-08 · Exported: 2026-08-09 · Source: https://boothcheck.com/report/LINE

Headline

FieldValue
TickerLINE
CompanyLineage, Inc.
Current price$41.11/sh
CompositionGlobal Warehousing 74% / Global Integrated Solutions 26%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisreit
Implied FFO growth2.7%
Price-to-FFO11.7x
FFO yield8.6%

Solve inputs: computed at a 10.7% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied AFFO growth ~3.4pp.

Reconcile: at the x-ray's 9.3% required return this reads ~-2.8%/yr; the models below use their own rates.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
cohort percentile (of 105 peers)46
sustained it ~5 years at this level79%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.15x3expensive
Earnings1.13x2expensive
Relative0.97x3justifies
Growth1.40x4expensive

Families that justify the price: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.6%); the inversion above states its own rate.

Per-Model Detail (n=12)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noFCF base $0.2B, growth 1% (input: historical growth), terminal g 1.5%, WACC 5.6%, 5yr projection
DCF Exit MultipleGrowth$31.061.32xyesExit EV/EBITDA: 13.1x / 15.1x / 17.1x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative——noP/E 25.66x (blended: static sector reference 35x + trailing (TTM) 12x), scenarios: 21.6x / 25.7x / 29.7x (bear / base = reference held flat / bull), EV/EBITDA 20x
Simple DDMGrowth$20.821.97xyesDPS $2.34, g=-1.8% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDMGrowth$38.881.06xyesStage 1: 2% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$35.631.15xyesReference only (book value floor): BV/sh $35.63, ROE negative
Two-Stage Excess ReturnAsset$32.071.28xyesReference only (book value with convergence): BV/sh $35.63, ROE converges to ke
Discounted Future Market CapGrowth$27.881.47xyesRev $5.4B, growth 1% (input: historical growth; tapered), Terminal P/S: 1.5x / 1.7x / 2.0x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$42.360.97xyesFFO/share $3.53, growth 2% (input: historical FFO/share growth, 3y median), PEG=0.00 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$0.014111.00xyesNormalized EBIT (3y avg op income, one-time charges added back) $0.04B × (1−21%) / WACC 5.6% → EPV (no growth) (excluded from median)
Residual IncomeAsset——no—
Graham NumberAsset$53.200.77xyes√(22.5 × FFO/share $3.53 × BVPS $35.63) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $1.08B × sector EV/EBITDA 20.0x
FCF YieldEarnings$0.014111.00xyesFCF $153.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.014111.00xyesSBC-adj FCF $0.04B (FCF $0.15B − SBC $0.12B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$34.811.18xyesFFO/share $3.53 × (8.5 + 2×1.6%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$1.2034.26xyesBV $35.63 × (ROIC 0.2% / WACC 5.6%) (excluded from median)
P/Sales SectorRelative——noRevenue $5.36B × sector P/S 6.0x
PEG Fair ValueRelative$17.652.33xyesFFO/share $3.53 × (PEG 1.5 × growth 1.6% (input: historical FFO/share growth, 3y median)) → PE 2.4x
Earnings YieldEarnings$38.161.08xyesFFO/share $3.53 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative$49.620.83xyesFFO/share $3.53 × 14.1x P/FFO (route cohort median, n=85); FFO $0.80B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 227M
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Global Warehousingoperatingenterprise$4.0b—withheldunresolved no unit value
Global Integrated Solutionsoperatingenterprise$1.4b—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt (REIT basis)$7.4b
Net debt / FFO9.20x
Fixed-charge coverage (FFO basis)4.0x
Funds from operations (trailing)$801.0m
Share count CAGR (dilution)13.0%
Burning cashno

REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.

Bullet Takeaways

Bull Case

A cold-storage REIT is valued differently from an operating company, and reading Lineage on the wrong yardstick is how the bear case overstates its point. The depreciation-driven earnings-power methods say the stock is wildly expensive, but that is an artifact of how real estate works: the buildings carry enormous non-cash depreciation that crushes reported earnings while the cash keeps coming in. The right lens is adjusted funds from operations, the cash earnings plus property depreciation minus the maintenance capex that keeps the freezers running, and on that lens Lineage trades around 15 times AFFO, a normal-to-premium multiple for a REIT with this asset base, not the four-thousand-times figure a naive earnings screen produces.

The asset is genuinely hard to replicate. Lineage operates an irreplaceable network of temperature-controlled warehouses positioned near food producers and distribution hubs, and the 10-K describes its customer arrangements as "warehouse agreements... designed to accommodate the individual needs and characteristics of our customers" with "pricing increase mechanisms based on inflationary cost increases". That last clause is the bull case in miniature: the contracts pass cost inflation through to customers, which is why same-warehouse storage revenue per physical pallet rose 2.2% to $67.01 in the most recent quarter even as occupancy softened. Pricing power on the rent line, in a business with high physical barriers to new supply, is the durable part of the story.

The supporting frames agree with the cash story. The asset-value methods land near or below the price because book value per share of $35.63 sits not far under the market price, and the relative methods, anchored on the REIT cohort's funds-from-operations multiple of roughly 13 times, read the stock as fairly to modestly cheap rather than expensive. The most recent quarter showed the operating model stabilizing: revenue was essentially flat at $1,297 million while adjusted EBITDA grew 3.3% to $314 million at an improving 24.2% margin. A REIT whose margin is widening on flat revenue is taking cost out of the network, and combined with the inflation-linked pricing, that is the engine that funds a covered distribution while the occupancy cycle works through.

Bear Case

The bear case is about the moat softening at the edges, and the edge to watch is occupancy. Lineage's pitch is an irreplaceable cold-storage network, but a network only earns when its boxes are full, and same-store physical occupancy fell 290 basis points to 76.4% in the most recent quarter. A warehouse at 76% utilization is a warehouse with a quarter of its earning capacity idle, and the slide reflects a real shift: food customers carrying leaner inventories after the post-pandemic stocking boom unwound. Same-warehouse net operating income actually declined 0.9% in the quarter even as the company raised price per pallet, which is the precise signature of a moat under pressure: the pricing power is real, but it is no longer enough to offset the emptier space. The advantage erodes not because a competitor took share but because the underlying demand for the storage itself thinned.

The competitive map adds to the unease rather than relieving it. The 10-K is explicit that in its warehousing segment Lineage competes with "Americold, NewCold, and local operators", and notes that some customers "for whom private warehousing is a viable option" may self-supply. The most credible threat to a third-party cold-storage REIT is not another REIT; it is a large food company deciding to build and run its own freezers, removing a customer entirely. With occupancy already soft, the pricing leverage that the bull leans on becomes harder to push without accelerating that self-supply decision.

The financial pressure point is the balance sheet, and it has already shown up in the numbers. Net debt sits near eight times funds from operations, a heavy load for a REIT, and the most recent quarter's 9% decline in AFFO per share came specifically because prior interest-rate hedges expired. The 10-K quantifies the exposure: as of the latest annual filing Lineage carried "$2,772 million of variable-rate debt" on its revolver and term loans. As hedges roll off into a higher-rate environment, interest expense rises and AFFO, the very cash the distribution is paid from, compresses. The dividend currently runs at $2.34 a share against AFFO guidance of $2.75 to $3.00, a coverage cushion that is adequate but not generous, and one that thins further if rates stay high while occupancy stays soft. A heavily leveraged REIT growing AFFO at roughly 2% a year has little room for both pressures at once.

Valuation

Lineage is a real-estate trust, so the right measure is adjusted funds from operations, the cash earnings plus property depreciation minus the maintenance capex that keeps the buildings leasable, not an operating earnings multiple. At roughly 15 times AFFO, the price implies the trust grows its adjusted funds from operations about 2.4% a year. That is a modest, real-estate-appropriate assumption, and it sits in the upper half of the REIT group on price-to-AFFO, so the market is paying a slight premium for the irreplaceability of the cold-storage network rather than betting on rapid growth.

The method families split along exactly the lines a REIT should. The earnings-power lens reads the stock as absurdly expensive, with figures running into the thousands of times, but that is the depreciation artifact: capitalizing the depreciation-gutted operating income of a real-estate company produces nonsense, which is why the report prices Lineage on FFO instead. Strip that noise away and the picture is benign. The funds-from-operations multiple, the appropriate relative measure, lands the price modestly below the REIT cohort's roughly 13-times median, and the asset-value methods anchor near book value of $35.63 a share, just under the market price. Only the forward-growth lens reads the stock as a touch rich, and it does so on a tapered 1% revenue growth path, which understates a business that grows by raising price per pallet rather than by adding revenue volume.

The cohort comparison is unusually clean here because Lineage has a near-pure public comparable: Americold, the other large temperature-controlled warehouse REIT, faces the same occupancy cycle and the same food-customer destocking, so the two move together and Lineage's multiple is best judged against it rather than against the broad REIT index. The decisive figures are on the balance sheet, not the income statement. Net debt near eight times FFO with fixed-charge coverage around four times means the trust is solvent and the distribution is covered, but the leverage is what makes the AFFO line sensitive to rates: as hedges expire, the variable-rate exposure the filing documents flows straight into interest expense and out of the cash available to grow the payout. The price is supported by the asset value beneath it; what it is most exposed to is the cost of the debt that funds it.

Catalysts

The Q1 FY2026 print was a stabilization story with a financing asterisk. Revenue was essentially flat at $1,297 million, adjusted EBITDA grew 3.3% to $314 million with margin improving to 24.2%, and the Global Warehousing segment grew revenue 4.3% to $985 million with segment NOI up 1.1%. But AFFO of $201 million, or $0.78 per share, fell about 9% year over year, and management attributed the decline specifically to the expiration of prior interest-rate hedges, noting that excluding that effect AFFO per share was roughly flat. The operating business held; the cost of money is what moved the cash line.

Occupancy is the catalyst to track. Same-store physical occupancy declined 290 basis points sequentially to 76.4%, which management framed as in line with expectations and seasonal, with economic occupancy at 82% holding a steady spread above physical. Whether occupancy bottoms and turns is the swing factor for same-warehouse NOI, which slipped 0.9% in the quarter despite a 2.2% increase in storage revenue per pallet. The pricing engine is working; the question is whether demand for the space stabilizes so that price and volume pull in the same direction again.

Management maintained full-year 2026 guidance for adjusted EBITDA of $1.25 to $1.30 billion and AFFO per share of $2.75 to $3.00. The concrete markers ahead are the occupancy trajectory through the seasonal cycle, the pace at which the remaining interest-rate hedges roll off and reprice, and any change in food-customer inventory behavior that would either fill or further empty the network. For a leveraged REIT, the rate path and the occupancy path together determine whether the distribution has room to grow or merely to hold.

Peer Cohorts (Per Segment, With Filing Citations)

Global Warehousing (reported)

Global Integrated Solutions (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 FY2026 earnings release · FY2024 10-K

View the full interactive LINE report on boothcheck