KeyBanc Downgrades Sovran Self Storage (SSS) to Hold; Valuation Call

KeyBanc downgraded Sovran Self Storage (NYSE: SSS) from Buy to Hold.

KeyBanc analyst says, "Despite what we expect to remain an attractive environment for self storage fundamentals, we cannot justify sufficient upside to support a BUY recommendation, and therefore, we downgrade SSS shares to HOLD. SSS reported what looks like a slight 3Q miss on a comparable basis, though the Company turned in strong top-line and SSNOI growth of 5.3% and 7.9%, respectively. That said, we remain somewhat concerned that the Company has not been able to claw back occupancy, which remains lower on a year-over-year basis by 110bps; with positive job growth in Texas and a slow recovery shaping up in SSS's Florida portfolio, we suspect that there could be some upside left in the tank for future quarters, though the comparables will grow more difficult and we remain concerned that the Company's portfolio continues to lose occupancy while SSS's peers have gained occupancy over the last several quarters."

For more ratings news on Sovran Self Storage click here and for the rating history of Sovran Self Storage click here.

Shares of Sovran Self Storage closed at $43.71 yesterday.

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