Extra Space Storage Inc. (EXR), headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT that owns and operates over 3,500 self-storage properties. Valued at $37.6 billion by market cap, EXR is the largest operator of self-storage properties in the U.S. that offers customers a wide selection of conveniently located and secure storage units, including boat storage, RV storage, and business storage.
Shares of this leading self-storage REIT have outperformed the broader market considerably over the past year. EXR has gained 39.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.7%. However, in 2024, EXR’s stock rose 11.2%, compared to SPX’s 18% rise on a YTD basis.
Zooming in further, EXR’s outperformance looks more pronounced compared to the Pacer Benchmark Industrial Real Estate SCTR ETF (INDS). The exchange-traded fund has gained about 12.6% over the past year. Moreover, EXR’s double-digit gains on a YTD basis outshine the ETF’s 2.5% returns over the same time frame.
EXR's strong performance over the past year is driven by higher occupancy and better-than-expected revenues, despite challenges with operating expenses and interest costs. Growth in same-store pools for Extra Space and Life Storage, along with cost savings in G&A and increased tenant insurance income, bolstered the successful quarter. The company also expanded its third-party management platform by adding 77 new stores.
On Jul. 30, EXR shares closed down marginally after reporting its Q2 results. Its core FFO of $2.06 surpassed Wall Street estimates of $2. The company’s net income per share stood at $0.88, down 41.3% year over year. EXR’s revenue increased 58.5% year over year to $810.7 million. It expects full-year core FFO to be between $7.95 and $8.15.
For the current fiscal year, ending in December, analysts expect EXR’s core FFO to decline marginally to $8.06 on a diluted basis. The company’s surprise history is mixed. It beat the consensus core FFO estimate in two of the last four quarters while missing the forecast on two other occasions.
Among the 16 analysts covering EXR stock, the consensus is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” eight “Holds,” one “Moderate Sell,” and one “Strong Sell.”
On Aug. 11, Jefferies analyst Jonathan Petersen maintained a “Hold” rating on EXR with a price target of $162.
While EXR currently trades above its mean price target of $167.56, the Street-high price target of $188 suggests an upside potential of 5.5%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
