- Raymond James analyst Jonathan Hughes upgraded CubeSmart (NYSE:CUBE) from Outperform to Strong Buy and lowered the price target from $60 to $52 (24.6% upside).
- Hughes maintained Public Storage (NYSE:PSA) with a Strong Buy and lowered the price target from $375 to $365 (15.7% upside).
- The self-storage REITs were vulnerable to the recent sell-off despite the positive fundamental updates. They have been among the most significant underperformers vs. the REIT average QTD.
- Hughes believes the recent weakness is profit-taking and fears over customer behaviors, notably move-outs and rents returning to more normal levels, despite little change through April.
- Hughes believes the declining new supply impact has likely declined further given the recent shift in macroeconomic and capital market conditions creating a scenario where fundamentals can surpass expectations for the next several years.
- The revised earnings estimates are not as optimistic as they would have been several weeks ago, as Hughes now incorporates some impact from a potential consumer-driven recession.
- Price Action: CUBE shares traded higher by 1.93% at $41.63 on the last check Monday.
