PSA - Public Storage gets new Buy rating at UBS as strong growth already price in
DNY59/iStock Unreleased via Getty Images UBS analyst Michael Goldsmith initiates coverage of Public Storage (PSA) with a Neutral rating as he figures the REIT's expected strong growth is already priced into its valuation. The analyst sees industry tailwinds from its 2,500+ facilities, expected long-term same-store growth of 3%, and growth from acquisitions of $2.7B in 2022 and then $800M/year thereafter. The $310 price target is 23% premium to a 24-month forward net asset value (4.8% cap rate). Goldsmith models 95% occupancy over the next three years from 94.5% in 2020 and 93.5% in 2019 as demand for self storage is expected to be strong. The facilities offer a scaling opportunity since PSA has the second most exposure to top 20 Metropolitan areas at 62% and the most exposure to top 50 MSAs with 87% of its stores in these markets. The Neutral rating on PSA disagrees with the Very Bullish Quant
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Public Storage gets new Buy rating at UBS as strong growth already price in