Utah-based Extra Space Storage Inc. (EXR), with a market cap of $35.5 billion, is a prominent REIT in the self-storage industry. It offers a wide range of well-located, secure storage units across the U.S., including boat, RV, and business storage. It is the largest self-storage management company in the U.S. and the second largest owner/operator of self-storage properties. The company is expected to announce its fiscal Q2 earnings results after the market closes on Tuesday, Jul. 30.
Ahead of the event, analysts expect EXR to report an FFO of $2 per share, down 2.9% from $2.06 per share in the year-ago quarter. The company has failed to surpass Wall Street's bottom-line estimates in three of the past four quarters while beating on one occasion. It reported a core FFO of $1.96 in the latest quarter, exceeding the consensus estimate marginally.
While Wall Street expects Extra Space Storage's FFO to decline marginally from $8.10 in fiscal 2023 to $8.04 in fiscal 2024, it is projected to rebound in fiscal 2025 with a 4% annual increase to $8.36.
EXR stock has surged 7.3% over the past 52 weeks, outperforming the S&P 500 Index's ($SPX) 23.6% gains but surpassing the Real Estate Select Sector SPDR Fund’s (XLRE) 6.3% return during the same period.
The company announced its Q1 earnings report on April 30. Initially, the market reacted negatively, causing the stock to drop by 2.3%. However, it quickly rebounded, gaining over 10% in the following trading sessions. The REIT reported a net income of $1.01 per share, close to analyst estimates of $0.99 per share, but this was a 30.8% decrease from the previous year, mainly due to non-cash charges from the Life Storage Merger.
In Q1, the company acquired five new stores and completed several development projects. It also added 97 stores (72 net) to its third-party management platform. By March 31, 2024, it managed a total of 1,881 stores, including 1,409 for third parties and 472 in joint ventures, solidifying its position as a prominent player in the self-storage industry. EXR also originated $164.3 million in mortgage and mezzanine bridge loans, demonstrating a strong emphasis on expanding its portfolio and revenue streams through strategic lending.
Analysts' consensus view on Extra Space Storage stock is cautiously optimistic overall, with a "Moderate Buy" rating. Among 16 analysts covering the stock, five recommend a "Strong Buy," one suggests a “Moderate Buy,” nine advise a "Hold, and the remaining one analyst gives a “Strong Sell" rating.
Although the stock is currently trading above its average price target of $158, the Street high price target for EXR is $180, indicating a potential upside of 7.3% from the current price levels.
On the date of publication, Kritika Sarmah 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.
