KeyBanc Downgrades Public Storage (PSA) to Underweight

KeyBanc downgraded Public Storage (NYSE: PSA) from Hold to Underweight with a price target of $170.00. Analyst Todd M. Thomas recommend investors Underweight the self storage subsector in 2015.

"PSA is at a relative disadvantage to the other REITs in the sector given: 1) peak occupancy levels; 2) relatively less investment opportunities; and 3) what we view to be a full valuation. Occupancy peaked in PSA’s portfolio at 95.1% during 2Q14 and ended 3Q14 at 93.8%. We suspect there may be modest occupancy upside from current levels, but the probability that occupancy inflects from a revenue tailwind to headwind is higher today than it has been at any other point during this cycle. Importantly, the stock trades at a 4.8% implied cap rate, which is 30 bps and 80 bps lower than the sector’s and REITs’ implied cap rates of 5.1% and 5.6%, respectively. Our $170 downside price target reflects a 5.2% implied cap rate," said Thomas.

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 $186.13 yesterday.

You May Also Be Interested In

• Stifel Downgrades Saipem (SPM:IM) (SAPMY) to Hold
• Needham Upgrades Netflix (NFLX) to Buy, 'on Rev Upside from Tech Stack'
• Stifel Canada Downgrades Saipem (SPM:IM) (SAPMF) to Hold