Lineage (LINE) is beginning to benefit from a better operating environment amid easing industry headwinds, RBC Capital Markets said in a note emailed Monday.

The investment firm said customer inventory levels appear to be troughing after customers reduced inventories following an unexpected build in late 2022 and early 2023. Pressure from new supply is also starting to abate as the company has been more successful winning customers back, analysts said.

Trade disruption, which accounts for about 15% of Lineage's business, has affected throughput but should begin to lap results in Q4, RBC said.

The firm said the remaining key risk is that higher inflation could lead food producers to raise prices, potentially affecting future sales volumes and inventory levels.

The firm models AFFO estimates of $2.93 per share in 2026, $2.92 in 2027 and $3.17 in 2028.

RBC Capital Markets maintained its outperform rating on Lineage and raised its price target to $48 from $44.

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