Extra Space Storage’s 4Q Sales Beat The Street Consensus

Extra Space Storage outperformed quarterly sales expectations as the self-storage management company benefitted from an increase in occupancy levels at its stores.

Extra Space Storage (EXR) posted earnings per share (EPS) of $1.19 during the fourth quarter, as compared with $0.86 in the year ago period. The company’s core funds from operations (FFO) per share increased 16.5% year-on-year to $1.48.

Revenue rose about 5.3% year-on-year to $353.5 million topping analysts’ estimates of $292.8 million. The sales increase was attributable to 2.3% growth in same-store revenue, the occupancy rate rose to 94.8% as compared to 92.4% in the comparable year-ago period.

For fiscal 2020, the company generated sales of $1.36 billion, up from the $1.31 billion posted in 2019. Diluted earnings per share came in at $3.71 versus $3.24 in the comparable year-ago period.

Extra Space Storage’s CEO Joe Margolis said, “Steady demand and muted vacates continue to result in all-time high occupancy levels, leading to solid rental growth across our diversified portfolio.”

Extra Storage Space announced a dividend of $1 for 1Q, an increase of 11.1% over the previous quarterly dividend.

Looking ahead to fiscal 2021, Extra Space Storage sees core FFO land between $5.85 to $6.05 and same-store revenue growth to be in the range of 4.25% to 5.50%. (See Extra Space Storage stock analysis on TipRanks)

On Feb. 4 Raymond James analyst Jonathan Hughes upgraded the stock to Buy from Hold and maintained a price target of $125 (3.5% upside potential).

Hughes noted, “Occupancy and net effective rates remained elevated into year-end 2020 and with expectations for this to continue into spring, the sector is well-positioned ahead of the peak summer leasing season.”

The rest of the Street has a Moderate Buy consensus rating on the stock based on 3 Buys and 1 Sell. The average analyst price target of $120.25 implies that shares are more than fully priced at current levels.

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