Gold prices bounce off 3-week lows; demand likely longer term
On Tuesday, Mizuho (NYSE:MFG) initiated coverage on Public Storage (NYSE:PSA), a leader in the self-storage sector, with a Neutral stock rating and a price target of $287.00. The stock, which has declined nearly 8% over the past week to $266.53, appears overvalued according to InvestingPro Fair Value analysis. The research firm recognized Public Storage for its strong operational capabilities and dominant brand presence in the industry, as well as its impressive net operating income (NOI) margin of 73%, which benefits from the company's efficient platform.
The analysts at Mizuho highlighted Public Storage's robust capital deployment strategy and its superior balance sheet, characterized by low leverage and a history of utilizing perpetual preferred equity effectively. According to InvestingPro data, the company operates with a moderate debt level and has maintained dividend payments for an impressive 45 consecutive years. Despite these strengths, Mizuho expressed concerns about the company's growth prospects in the near term (NT). The firm pointed to Public Storage's considerable size, limited pricing power, the absence of significant fee-based revenue, and its substantial exposure to the California market as potential obstacles to growth.
Looking ahead, Mizuho anticipates a potential for growth recovery in the second half of 2025 and into 2026. The analysts expect that as market fundamentals begin to improve, Public Storage could experience a rebound, aided by what they predict will be easier comparative metrics from previous performance periods. The coverage initiation and the set price target reflect Mizuho's measured outlook on Public Storage's stock performance in the near future. For deeper insights into Public Storage's valuation and growth prospects, including 8 additional ProTips and comprehensive financial analysis, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Public Storage reported a robust fourth quarter for 2024, with earnings per share (EPS) of $3.21, significantly surpassing analyst expectations of $2.56. Revenue was in line with forecasts, reaching $1.18 billion. The company anticipates increased acquisition activity in 2025, bolstered by its strong brand presence and strategic investments. Public Storage has also announced a proposed acquisition of Abacus Storage King, which UBS analysts have noted could lead to accretive earnings, although they maintain a Neutral rating and a $305 price target for the stock. The acquisition signifies Public Storage's strategy to expand beyond the U.S. market, despite potential complexities and an expected increase in self-storage supply in Australasia from 2025 to 2027. The acquisition's pricing is set at $1.47 per share, which is 27% higher than the unaffected price, with plans to fund the $620 million equity portion through Australian dollar-denominated unsecured debt. The company's digital transformation efforts are enhancing operational efficiency, and Public Storage has introduced a 2025 core FFO per share guidance of $16.35 to $17.00, indicating a stable outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.