Glendale, California-based Public Storage (PSA) primarily acquires, develops, owns, and operates self-storage facilities. Valued at a market cap of $51.8 billion, the company offers storage spaces for lease on a month-to-month basis for personal and business use and also provides other related operations, including tenant reinsurance and third-party self-storage management. It is expected to announce its fiscal Q4 earnings results on Tuesday, Feb. 18.
Ahead of this event, analysts expect the self-storage company to report an FFO of $4.23 per share, marginally up from $4.20 per share in the year-ago quarter. The company has surpassed Wall Street's FFO estimates in two of the last four quarters while missing on other two occasions. Its FFO of $4.20 per share in the previous quarter fell short of the forecasted figure by roughly 1.2%.
For fiscal 2024, analysts expect PSA to report an FFO of $16.70 per share, down 1.1% from $16.89 per share in fiscal 2023. Nonetheless, in fiscal 2025, FFO is expected to rebound, growing by 3.4% year-over-year to $17.27 per share.
Shares of PSA have marginally increased over the past 52 weeks, significantly underperforming both the S&P 500 Index's ($SPX) 26.5% rise and the Real Estate Select Sector SPDR Fund’s (XLRE) 6.5% return over the same time frame.
Shares of PSA fell 2% following its mixed Q3 earnings release on Oct. 30. The company’s revenue increased 3.8% year-over-year to $1.2 billion and slightly surpassed the Wall Street estimates. However, its core FFO of $4.20 per share declined 3% from the year-ago quarter and fell short of the consensus estimates by 1.2%. The rise in other direct property costs, repairs and maintenance expenses, and marketing and interest expenses mainly led to its FFO miss.
Moreover, the company’s same-store revenues declined 1.3% yearly to $926.3 million due to lower realized annual rent per occupied square foot and decreased occupancy. This might have further dampened investor confidence.
Yet, Wall Street analysts are moderately optimistic about Public Storage’s stock, with a "Moderate Buy" rating overall. Among 19 analysts covering the stock, 10 recommend "Strong Buy," and nine suggest “Hold.” The mean price target for PSA is $342.65, which indicates a modest 15.7% potential upside from the current levels.
