Investing.com -- Bank of America upgraded $Public Storage(PSA-N)$ (NYSE:PSA) to Buy from Neutral and Extra Space Storage (NYSE:EXR) to Neutral from Underperform, citing a more positive outlook for the self storage sector relative to other REITs.
While BofA does not anticipate a significant uptick in demand, it expects normalization at current levels, which it views as supportive in a "heightened macro uncertainty" environment.
Analysts noted self storage REITs should benefit in 2025 from a combination of easing year-on-year comparisons, a return to typical seasonal trends, and an 8% decline in new development.
In the first quarter of 2025, Public Storage’s and Extra Storage’s markets posted year-over-year spend growth of 1.7% and 1.8%, respectively, according to BofA credit and debit card data, improving from 0.1% and 0.6% in the prior-year period.
The upgrade of Public Storage is supported by its "strong and flexible balance sheet," the lowest leverage among peers, and valuation, with shares trading at a forward AFFO multiple of 18.8x versus a long-term average of 21.3x.
BofA raised PSA’s price objective to $368 from $349.
Extra Storage’s upgrade reflects reduced pushback to ECRI initiatives and improved card spend data.
The price objective for EXR was raised to $155 from $141.
Related articles
BofA upgrades Public Storage, Extra Space as it sees storage REITS defensive
Comerica shares downgraded by Evercore, JP Morgan on weakening outlook, valuation
eBay downgraded: Analyst sees ’cloudy backdrop’
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.