Wells Fargo downgrades CubeSmart on elevated 2023, 2024 expectations

Wells Fargo downgraded CubeSmart to Equal Weight from Overweight with a price target of $37, down from $46. The firm thinks expectations need to be reset lower for 2023 and 2024, with Street rate declines likely to persist well into 2024. The Street rate and occupancy declines to persist, making it difficult for CubeSmart to hit its 2023 guidance, the analyst tells investors in a research note. Assuming normal sequential seasonality returns, Wells projects asking rates will remain down 5% on average from Q4 of 2023 through the end of 2024, an additional pressure point on CubeSmart’s year-over-year growth.