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Investing.com - KeyBanc downgraded CubeSmart (NYSE:CUBE) from Overweight to Sector Weight on Monday, citing concerns about the self-storage company’s 2026 growth outlook. The current analyst consensus recommendation stands at 2.11, reflecting a cautious stance on the stock that trades at a P/E ratio of 23.93. According to InvestingPro data, CubeSmart appears slightly overvalued at its current price.
The downgrade comes despite CubeSmart raising its guidance for the third consecutive quarter in its recent third-quarter earnings report. KeyBanc also lowered its funds from operations (FFO) estimates for the company following the results. Despite these concerns, InvestingPro data shows CubeSmart has maintained dividend payments for 21 consecutive years, with a current dividend yield of 5.54%.
New York City has provided significant support for CubeSmart, delivering 2.6% same-store revenue growth year-to-date, compared to a 0.6% decline overall. However, KeyBanc noted that fundamental conditions in the broader market remain challenged.
Looking ahead, KeyBanc expects New York City to remain a strong performer for CubeSmart, but warned that favorable operating expenses in 2025 may create difficult comparisons in 2026, potentially creating a headwind to net operating income growth regardless of operational recovery.
KeyBanc anticipates CubeSmart will perform in line with the self-storage subsector moving forward, a key factor in its decision to lower the stock rating to Sector Weight.
In other recent news, CubeSmart reported its third-quarter earnings for 2025, which showed a slight miss on earnings per share (EPS) forecasts but a modest beat on revenue expectations. The company posted an EPS of $0.36, falling short of the $0.38 forecast, while revenue reached $285.08 million, surpassing the expected $281.89 million. RBC Capital adjusted its price target for CubeSmart from $47 to $46, though it maintained an Outperform rating. The firm noted that the move-in rates turning positive year-over-year was a better-than-expected development. These updates highlight the latest developments surrounding CubeSmart’s financial performance and analyst perspectives.
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