Public Storage’s Mixed Performance Amid Market Gains
With a market cap of $59.1 billion, Public Storage (PSA) stands out as the largest owner and operator of self-storage facilities across the United States, offering flexible month-to-month storage solutions for both personal and business needs. Based in Glendale, California, the company manages over 3,000 facilities in 40 states and holds a 35% stake in Shurgard Self Storage, which oversees 281 facilities throughout Western Europe.
In the last year, shares of Public Storage have performed slightly better than the overall market. PSA has rallied 32.5% over the past 52 weeks, while the broader S&P 500 Index ($SPX) increased by 31%. However, in 2024, PSA’s shares have risen only 10.7%, trailing behind the SPX’s notable 25.2% gain year-to-date.
Examining returns more closely, the self-storage REIT has also outperformed the Real Estate Select Sector SPDR Fund’s (XLRE) 21.9% return over the last year and a 10.1% year-to-date return.
Despite exceeding Q3 revenue expectations with $1.2 billion, PSA shares dropped over 2% the next day. This decline occurred after the company’s core FFO per share hit $4.20, falling short of analysts’ estimates and reflecting a 3% decrease year-over-year. Additionally, PSA faced challenges in its same-store operations, including lower realized annual rent per occupied square foot, decreased occupancy rates, and rising costs in property operations, maintenance, marketing, and interest. Concerns arose from a 2.5% drop in same-store net operating income (NOI) and diminished NOI margins, signaling potential inefficiencies and weakening demand in the self-storage market.
Looking ahead, PSA is projected to report an FFO per share of $16.73 for the fiscal year ending in December, indicating a slight year-over-year decline. Over the last four quarters, the company’s surprise earnings history has been inconsistent — it exceeded consensus estimates twice while missing on two occasions.
A consensus rating from 19 analysts covering PSA suggests a “Moderate Buy.” This includes 10 “Strong Buy” ratings, 8 “Holds,” and 1 “Strong Sell.”
This rating demonstrates a slightly more positive outlook compared to three months ago when there were only nine “Strong Buy” ratings for the stock.
On November 12, BofA adjusted its price target for Public Storage to $354 while maintaining a “Neutral” rating, reflecting Q3 results that signal limited near-term growth in the self-storage sector.
The average price target currently stands at $346.24, representing a modest premium of just 2.6% to PSA’s present levels. Meanwhile, the highest target from analysts at $388 implies a potential upside of 14.9% from current prices.
On the date of publication, Sohini Mondal did not hold any positions in the securities mentioned in this article. All information and data are provided for informational purposes only. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
