Citing stabilizing revenue growth and attractive valuation, Goldman Sachs
“Two factors support the view that PSA’s same store growth deceleration is near over: (1) US trailing twelve month employment growth – which is highly correlated to PSA same store revenue growth – has ceased to decline for five consecutive months, and (2) PSA’s period-end rent and occupancy levels are slowing less,” analyst Andrew Rosivach wrote in a note.
Rosivach pointed out that Public Storage’s end of quarter occupancy was flat in the
Moreover, the analyst expects Public Storage’s growth to surpass that of
That said, Rosivach cut his 2017/2018 FFO estimates to $10.50/$11.11 from $10.54/$11.18. However, his 2016 FFO view remains unchanged at $9.58.
The analyst’s $220 price target is based on a target 2019 AFFO multiple of 19.4x (up from 18.2x previously), which is a 10 percent premium to the sector.
“We still believe PSA justifies a premium vs. the rest of our REIT coverage, supported by lower relative leverage and a 7.4 percent 2017 growth rate, 170 basis points above our coverage average,” Rosivach added.
Shares of Public Storage closed Friday’s trading at $207.75.
Image Credit: By Raysonho @ Open Grid Scheduler / Grid Engine (Own work) [CC0], via
|Oct 2016||Goldman Sachs||Upgrades||Sell||Neutral|
|Aug 2016||Evercore ISI Group||Upgrades||Sell||Hold|
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