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Investing.com - Kepler Cheuvreux upgraded Shurgard Self Storage SA (BR:SHUR) from Hold to Buy on Tuesday, setting a price target of EUR37.00.
The upgrade comes after a period of underperformance for the European self-storage company, which has maintained relatively resilient operations despite challenging economic growth and housing activity across Europe.
Kepler Cheuvreux noted that Shurgard has positioned itself as a natural consolidator in the fragmented self-storage market through acquisitions and developments over the past two years, including the LOK acquisition. The company has increased its asset base by almost 25% over 18 months, excluding revaluation gains.
The research firm acknowledged that rising capital costs have prevented the company from translating external growth into accretive earnings per share (EPS), with 2024 EPS expected to be flat at best compared to 2023 levels. This earnings stagnation contributed to Shurgard’s stock derating after previously trading at premium multiples.
Looking forward, Kepler Cheuvreux expects Shurgard’s earnings to accelerate by 2027 as stores mature, projecting a 5.3% EPS compound annual growth rate through 2027, which creates what the firm describes as a positive risk/reward profile for investors.
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