Extra Space Storage: Market Insights and Performance Review
Extra Space Storage Inc. (EXR), based in Salt Lake City, Utah, holds the title of the largest self-storage operator in the United States. With a market capitalization of $36.2 billion, the company operates over 3,700 locations across 42 states and Washington, D.C., managing about 283 million square feet of rentable space through its brands Extra Space, Life Storage, and Storage Express.
Recent Stock Performance
Over the past year, shares of Extra Space Storage have underperformed slightly compared to the broader market. In the last 52 weeks, EXR has increased by nearly 32%, whereas the S&P 500 Index ($SPX) has posted a 32.6% gain. Year-to-date in 2024, EXR shares are up 6.6%, contrasting sharply with the S&P’s impressive 26.5% increase.
Despite this slower growth, the company has outperformed the Real Estate Select Sector SPDR Fund (XLRE), which saw a 21.9% return over the same period. Yet, EXR has lagged behind XLRE’s 12.3% return thus far in 2024.
Q3 Earnings Report Analysis
On October 29, Extra Space Storage reported better-than-expected Q3 figures, with an FFO per share of $2.07 and revenues reaching $824.8 million. However, shares dropped slightly the following day due to worries over a decline in same-store revenues and net operating income (NOI). Interest expenses surged by 16.2% year-over-year to reach $142.9 million, adding further pressure on profitability. Additionally, lowered guidance for same-store NOI growth, projected to be negative for the full year, also played a role in the share price decline.
For the current fiscal year ending in December, analysts expect EXR to report an FFO per share of $8.09, indicating a modest decline from the previous year. The company’s history of exceeding earnings estimates has been mixed; it has beaten expectations in three of the last four quarters.
Analyst Ratings and Price Targets
The consensus rating among the 18 analysts covering Extra Space Storage is a “Moderate Buy.” This assessment includes five “Strong Buy” ratings, one “Moderate Buy,” ten “Holds,” one “Moderate Sell,” and one “Strong Sell.”
Additionally, on November 25, Scotiabank revised its price target for EXR to $167, maintaining an “Underperform” rating. This change reflects concerns over inflation-driven increases in Treasury yields and the perception that REITs appear historically costly compared to real economic yields.
Currently, EXR is trading below the average price target of $175.12. The highest price target from analysts stands at $198, suggesting a possible upside of 15.8% based on current pricing.
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 are solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
