Goldman Sachs Downgrades Public Storage (PSA) to Sell
Get Alerts PSA Hot Sheet
Rating Summary:
13 Buy, 13 Hold, 1 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 11 | Down: 13 | New: 18
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(Updated - April 25, 2016 8:41 AM EDT)
Goldman Sachs downgraded Public Storage (NYSE: PSA) from Neutral to Sell with a price target of $244 (unchanged). Analyst Andrew Rosivach sees limited upside potential.
"Our downgrade is based on (1) much smaller expected upside surprise to estimate revisions, (2) limited upside potential to our 2016 same store revenue growth estimate (6.2%), (3) a much smaller relative balance sheet advantage than in the past (a key rationale for the PSA historical premium), and (4) peak relative valuation, which has been a key driver of forward stock performance," said Rosivach.
"Our new 2016 PSA FFO estimate is now only 1% above consensus vs. 6% a year ago and 3% at the beginning of 2016. We believe the main impediment to outsized revenue growth is PSA’s lower financial leverage (PSA’s earnings sensitivity to 10% topline growth of 11% is below our coverage average of 13.9%, all else equal) and size (market cap nearly 4x that of EXR) as a larger earnings base reduces the impact of acquisitions," added the analyst.
For an analyst ratings summary and ratings history on Public Storage click here. For more ratings news on Public Storage click here.
Shares of Public Storage closed at $256.94 yesterday.
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