Figma Shares Indicated To Open $105/$110
Tuesday, BofA Securities adjusted its stance on Extra Space Storage (NYSE:EXR), transitioning the stock rating from Buy to Neutral. Concurrently, the firm increased the price target on the company’s shares from $141 to $155. According to InvestingPro data, EXR maintains a "GREAT" financial health score and stands as a prominent player in the Specialized REITs industry. BofA Securities acknowledged the company’s favorable position within the self-storage sector, which is deemed less susceptible to macroeconomic risks and corporate stagnation, particularly when compared to the industrial sector.
The revision follows a series of positive indicators, including feedback from channel checks during a recent tour in Chicago, which suggested minimal resistance to Early Childhood Resource Initiative (ECRI) measures that are anticipated to bolster revenue growth in 2025. While InvestingPro analysis indicates analysts expect a sales decline this year, the company has demonstrated strong financial stability, maintaining dividend payments for 22 consecutive years with a current yield of 4.69%. Additionally, BofA Securities expects Extra Space Storage to benefit from its single brand initiative, which involves rebranding Life Storage Inc. (NYSE:LSI) facilities under the EXR banner. This move is also projected to yield ongoing cost savings throughout 2025.
Supporting the upgraded price target are recent trends in consumer spending data. According to aggregated Bank of America credit and debit card data, markets relevant to EXR experienced a 1.8% year-over-year average spend increase in the first quarter of 2025, an uptick from the 0.6% year-over-year increase recorded in the same period of the previous year.
In terms of valuation, Extra Space Storage’s forward 4-quarter Adjusted Funds From Operations (AFFO) multiple stands at 18.5 times. This figure is slightly below the real estate investment trust (REIT) sector’s average of 19.5 times and less than the long-term average (LTA) of 19.8 times, as well as the REIT average of 20.2 times. This relative valuation underpins BofA Securities’ revised perspective on the stock.
In other recent news, Extra Space Storage reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $1.24, which exceeded analysts’ expectations of $1.07. However, the company’s revenue came in slightly below forecasts at $821.89 million, compared to the anticipated $825.25 million. Extra Space Storage has also completed a public offering of $500 million in senior notes, with an annual interest rate of 5.400%, due in 2035. This issuance is part of their strategic financial maneuvers, with proceeds intended to support ongoing operations and growth initiatives. Additionally, the company recently acquired Life Storage, a move that Mizuho (NYSE:MFG) analysts believe will enhance its market reach and revenue through synergies. Mizuho has initiated coverage on Extra Space Storage with an Outperform rating, setting a price target of $141.00, citing the company’s robust portfolio and strategic initiatives. Meanwhile, SmartStop Self Storage REIT announced a one-for-four reverse stock split, affecting its Class A and Class T common stock, which aims to consolidate shares and potentially improve marketability and liquidity.
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