Truist Securities sets $38 target for SmartStop Self Storage stock

On Monday, Truist Securities initiated coverage on SmartStop Self Storage , traded on the New York Stock Exchange under the ticker (NYSE:SMA), with a Buy rating and a price target of $38.00. Currently trading at $33.45 and near its 52-week high of $35.07, according to InvestingPro data, the stock has shown strong momentum. The firm’s analyst highlighted several factors contributing to the positive outlook for the company.

SmartStop Self Storage has been recognized for its significant market exposure, particularly for its unique and dominant position in the Greater Toronto Area (GTA). The GTA has shown robust growth and currently has a supply per capita market of 2.3 times, which is significantly lower than the US average of 6.3 times. This limited supply in a growing market underpins the company’s strong positioning.

The analyst also pointed out SmartStop Self Storage’s relatively attractive same-store revenue (SSREV) growth expectations for 2025, projecting a 2.2% increase compared to the industry peers’ average decline of 0.5%. While the company generated revenue of $227.56M in the last twelve months with a robust gross margin of 69.29%, InvestingPro data shows it remains unprofitable with a net loss of $18.83M. In addition, SmartStop’s historical performance was noted, with same-store net operating income (SSNOI) growth of 6.1% from 2022 to 2024, slightly above the peer average of 6.0%, and a three-year SSREV growth of 5.9%, compared to peers at 5.6%.

Looking ahead, the analyst forecasts elevated funds from operations (FFO) per share growth expectations of 12.4% year-over-year in 2025 and 15.5% growth in 2026. These projections are part of the firm’s model, which also anticipates potential margin enhancements as SmartStop Self Storage continues to mature and invest in technology, operations, and pricing strategies.

Moreover, the company’s strong external growth potential following its approximately $932 million initial public offering was emphasized. With a $400 million acquisition pipeline, SmartStop Self Storage, currently valued at $1.3B market cap, is expected to achieve meaningful growth from a smaller asset base. InvestingPro subscribers can access additional insights, including 6 key ProTips and comprehensive financial metrics that provide deeper analysis of the company’s growth potential.

Lastly, the valuation of SmartStop Self Storage was considered favorable by the analyst, with an implied capitalization rate of approximately 6.6%, which is 75 basis points less expensive than its peers, suggesting a more attractive investment proposition.

In other recent news, SmartStop Self Storage has been the focus of several analyst reports highlighting its financial prospects and strategic initiatives. Baird initiated coverage with an Outperform rating and a price target of $38.00, noting the company’s potential for earnings growth, particularly through expansion in Canada and U.S. markets. KeyBanc also set a $38.00 price target, emphasizing SmartStop’s significant industry presence and successful initial public offering, which raised $875 million to reduce leverage and fund future investments. Stifel analysts provided a Buy rating with a $40.00 target, citing the company’s strong financial position post-IPO and its potential for funds from operations growth.

JPMorgan began coverage with an Overweight rating and a $36.00 price target, pointing to SmartStop’s expansive U.S. and Canadian presence as advantages and predicting net operating income growth slightly above peers by 2025. BMO Capital Markets also assigned an Outperform rating with a $40.00 target, highlighting SmartStop’s high-quality portfolio and growth potential through acquisitions. The firm’s strategic approach and market positioning are expected to drive future performance, according to BMO’s analysis. Collectively, these analyses reflect a positive outlook on SmartStop Self Storage, with varying price targets and growth expectations based on strategic initiatives and market conditions.

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