2024-05-17 02:27:42 ET
Summary
- Extra Space Storage has underperformed in the market due to high interest rates and excess supply challenges in the self-storage industry.
- The company's recent earnings report showed a decrease in core funds from operations due to margin pressure, but the business may be bottoming.
- Despite these challenges, Extra Space has seen improvement in occupancy and same-store revenue, and its acquisition of Life Storage is showing progress.
- Long-term rates do impact EXR shares significantly, and so a further rise in rates would be a headwind for performance.
Shares of Extra Space Storage ( EXR ) have been a significant underperformer this year, losing about 2% of their during a strong equity market. High interest rates continue to weigh on real estate valuations, and the self-storage face has also faced excess supply challenges. I last covered EXR in December , rating shares a sell, arguing fair value was in the $137-$149 range. Since then, they are flat, missing out on the market’s 13% rise. Given this underperformance, now is a good time to revisit Extra Space. ...
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Extra Space Storage: Results Are Improving, But Rates A Risk (Rating Upgrade)