Valued at a market cap of $59.9 billion, Public Storage (PSA) is a leading real estate investment trust (REIT) specializing in self-storage facilities. As the largest operator in the sector, the California-based company acquires, develops, and manages storage spaces for personal and business use across the U.S. and Europe.
Shares of this self-storage facility REIT have underperformed the broader market over the past 52 weeks. PSA has rallied 22.9% over this time frame, while the broader S&P 500 Index ($SPX) has increased 27.5%. In 2024, shares of PSA are up 11.4%, compared to SPX’s 17.8% gain on a YTD basis.
Zooming in further, although PSA has slightly outpaced the Residential and Multisector Real Estate ETF’s (REZ) 22.2% gain over the past 52 weeks, it has lagged behind REZ's 16.7% YTD return.
Public Storage has underperformed relative to the SPX due to increased industry over-capacity and declining move-in rates, along with higher interest rates raising capital costs. Moreover, despite exceeding expectations for funds from operations, the stock dropped 2.8% following its Q2 earnings release due to disappointing revenue, which fell short of Wall Street forecasts. Additionally, the company's outlook was adjusted downward to reflect competitive pressures on move-in rents,
For the current fiscal year, ending in December, analysts expect PSA’s FFO to decline 1% year over year to $16.72 per share. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, seven “Holds,” and one “Strong Sell.”
The configuration is less bullish than three months ago, with 11 analysts suggesting a “Strong Buy.”
On Aug. 22, Barclays raised Public Storage's price target to $374 - Street-high price target and kept an “Overweight” rating, adjusting forecasts due to softer seasonal demand and anticipated narrowing declines in self-storage REIT metrics. This implies a potential upside of 10.1% from the current price. As of writing, PSA is trading above the mean price target of $321.53.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
