As previously reported, Wolfe Research analyst Andrew Rosivach downgraded Extra Space Storage to Peer Perform from Outperform, citing valuation and lower expected growth in 2023. The analyst believes valuation is stretched given his estimated growth in 2023 of about 2%. The stock trades at a premium to the storage space and only a slight discount to his REIT coverage, yet has an elevated two-year PEG of 4.6-times versus his REIT coverage at 3.2-times. Rosivach also notes that the company has held occupancy better than any of its peers to end 2022, but he has some concerns about what has happened to street rate and if the company will be able to push ECRI meaningfully enough to offset that as the space enters a challenging operating environment. Additionally, the analyst views the company’s current floating rate debt exposure as a potential headwind to earnings, and believes that is a driver of his subpar growth estimates in 2023.
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Published first on TheFly
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Read More on EXR:
- Extra Space Storage downgraded to Peer Perform from Outperform at Wolfe Research
- Extra Space Storage downgraded to Hold from Buy at Truist
- Extra Space Storage upgraded to Outperform from Market Perform at Raymond James
- Extra Space Storage downgraded to Neutral from Overweight at JPMorgan
- Extra Space Storage price target lowered to $175 from $225 at Truist