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Barchart
Barchart
Kritika Sarmah

Is Public Storage Stock Underperforming the Nasdaq?

Based in Glendale, California, Public Storage (PSA) is a leading provider of self-storage solutions, renowned for its extensive portfolio of storage facilities across the U.S. and Europe. With a market cap of $58.5 billion, Public Storage is recognized for its innovation, operational excellence, and commitment to delivering secure and convenient storage options.

Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Public Storage fits this criterion perfectly, exceeding the mark. Public Storage stands out as a leading REIT, boasting a vast portfolio of over 2,200 self-storage locations across the U.S., Canada, and Europe, along with a significant ownership stake in Shurgard Storage Centers.

However, it's not all sunshine and rainbows. The self-storage operator has dipped 9.7% from its 52-week high of $369.99 reached on Oct. 1. Despite this decline, shares of PSA have plunged 3.4% over the past three months, underperforming the broader Nasdaq Composite ($NASX), which has surged 19% over the same time frame.

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In the longer term, Public Storage's shares have surged 23.9% over the past 52 weeks, lagging behind $NASX's 40.4% return in the same period. On a YTD basis, PSA’s 9.5% gain compared to SPX's 32.3% rise.

While PSA has been trading above its 200-day moving average since early June, it has been trading under its 50-day moving average since early December. 

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On Oct. 30, Public Storage released its Q3 earnings, and its shares rose 1.4%. Its revenue of $1.2 billion topped Street’s forecasts, but core FFO per share of $4.20 missed the consensus estimate and declined 3% year-over-year. 

The company faced weaker same-store performance, marked by declines in realized annual rent per occupied square foot and occupancy rates, coupled with rising costs for property operations, maintenance, marketing, and interest. These challenges contributed to a 2.5% drop in same-store net operating income (NOI) and a narrower NOI margin, highlighting concerns over reduced operational efficiency and softening near-term demand in the self-storage market.

While its rival Extra Space Storage Inc. (EXR) has delivered a 19.7% increase over the past 52 weeks, trailing both PSA and the broader equity index, it has lagged behind PSA on a YTD basis with a 2% gain.

Analysts are cautiously optimistic about PSA’s prospects. The stock has a consensus rating of “Moderate Buy” from the 19 analysts in coverage. Its mean price target of $349.82 indicates a potential upswing of 4.7% from prevailing price levels. 

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