Analyst Note| Yousuf Hafuda |
Americold Realty reported muted fourth-quarter results, with a few idiosyncratic factors providing a drag on the firm’s profitability. Despite these items, cold storage remains well positioned with a fundamentally recession resistant business model. During the fourth quarter, Americold reported core funds from operations, or FFO, of $0.39 per share--a modest increase as compared with $0.33 during the fourth quarter of 2019. Meanwhile, full-year FFO came in at $1.24 per share, higher than the figure of $1.19 during 2019. Fourth quarter net operating income, or NOI, increased 11% on a year-over-year basis, with annual NOI increasing 15.3%. Although these figures seem positive, Americold reported a net loss of $0.21 per share during the fourth quarter, largely driven by a non-cash charge due to a currency hedge, acquisition related litigation expenses, and a cyber security related incident. Despite the mixed nature of this quarter’s earnings results, we will be maintaining our $33 per share fair value estimate for no-moat rated Americold Realty.