Extra Space Storage Inc. Faces Challenges Despite Strong Q3 Results
Company Overview and Market Position
Extra Space Storage Inc. (EXR), based in Salt Lake City, Utah, is a leading real estate investment trust (REIT) focused on self-storage properties. With a market capitalization of $30.2 billion, Extra Space manages numerous storage facilities across the United States.
As a large-cap stock, valued at over $10 billion, Extra Space Storage exemplifies robust scale, stability, and significant influence in the self-storage market. The company boasts a diverse range of properties, advanced digital marketing strategies, and efficient operations. This geographical diversity helps it remain resilient against local market shifts.
Current Stock Performance
Despite its successes, the stock is facing hurdles. EXR shares are currently trading 20.5% lower than their 52-week high of $184.87, reached on September 18. Over the past three months, the stock has declined 18.5%, lagging behind the Real Estate Select Sector SPDR Fund (XLRE), which dropped 8.7% in the same period.
In terms of long-term performance, EXR has decreased by 8.3% year-to-date and 3.4% over the past year, while XLRE has recorded gains of 1.8% in 2024 and 4% overall in the previous year.
EXR’s trading patterns reveal a bearish trend, as shares have been below their 50-day moving average since early January and fell below the 200-day moving average in early October.
Recent Earnings and Market Reaction
On October 29, Extra Space Storage reported stronger-than-expected third-quarter results, with a funds from operations (FFO) per share of $2.07 and revenue of $824.8 million. Despite these positive numbers, the stock saw a slight decline in the following trading session, primarily due to concerns over decreasing same-store revenues and a reduction in same-store net operating income (NOI). The company’s downward revision in guidance, indicating negative same-store NOI growth for the year, further impacted stock performance.
In comparison, competitor Public Storage (PSA) has fared better, achieving a 1.5% gain over the past year.
Analysts’ Perspective
Despite recent setbacks, analysts maintain a moderately optimistic outlook for EXR. The stock has received a “Moderate Buy” consensus rating from 18 analysts. The average price target is set at $174.82, suggesting an upside of 18.9% from current trading levels.
On the date of publication, Kritika Sarmah did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. All information is for informational purposes only. For more details, please view 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.
