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Investing.com - Goldman Sachs downgraded Extra Space Storage (NYSE:EXR) from Buy to Neutral on Thursday, while lowering its price target to $146.00 from $169.00. According to InvestingPro data, two analysts have recently revised their earnings expectations downward for the upcoming period, aligning with this cautious stance.
The investment bank cited Extra Space Storage’s lower growth profile compared to historical performance as the primary reason for the downgrade. Goldman Sachs now estimates average annual FFO (funds from operations) growth of just 2.5% for each year from 2025 through 2027.
The storage REIT currently trades at 16.7 times next-twelve-months FFO, representing a 2% discount to the broader REIT sector. This contrasts with Extra Space Storage’s historical average premium of 8% to the sector.
Goldman Sachs noted that storage demand has not rebounded as quickly as expected, attributing this to high supply levels and lower housing turnover. These factors have resulted in slower move-in rates and revenue improvement, trends the firm believes will continue.
Since being added to Goldman Sachs’ Buy list on September 27, 2023, Extra Space Storage stock has gained 15.9%, underperforming both the RMZ index (up 17.1%) and the S&P 500 (up 50.0%) during the same period.
In other recent news, Extra Space Storage reported its second-quarter 2025 earnings, which showed a mixed performance. The company exceeded earnings per share (EPS) expectations with a reported EPS of $1.18, surpassing the forecast of $1.15. However, revenue did not meet projections, coming in at $841.62 million against the anticipated $844.76 million. Additionally, Extra Space Storage announced the pricing of $800 million in senior notes due in 2033, with a 4.950% interest rate. This offering is expected to close around August 8, 2025, pending customary closing conditions. Truist Securities recently adjusted its price target for Extra Space Storage, lowering it to $150 from $158, while maintaining a Hold rating. The firm also revised its funds from operations (FFO) per share estimates for 2025 and 2026. These developments reflect ongoing adjustments and strategies within the company.
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