2023-04-04 08:58:41 ET
- Raymond James upgraded Extra Space Storage ( NYSE: EXR ) to Strong Buy from Outperform on Tuesday after its $12.4B deal to merge with peer Life Storage ( LSI ). On the flip side, the firm downgraded fellow self-storage REIT CubeSmart ( NYSE: CUBE ) to Outperform from Strong Buy due to its recent outperformance.
- The EXR-LSI combination expands Extra Space's ( EXR ) asset base by more than 40%, analyst Jonathan Hughes pointed out in a note, adding that the combined company is expected to become the eighth largest REIT.
- Moreover, EXR expects synergies of $100M stemming from general and administrative savings and improved operations, the note said. That's better than what Hughes had expected previously.
- The Strong Buy rating diverges from the Quant system rating and the average Wall Street analyst rating, both at Hold.
- The upbeat coverage sent shares of Extra Space ( EXR ) higher by 1.6% , while CubeSmart ( CUBE ) stock, up 20.7% YTD, slipped 0.4% .
- Seeking Alpha contributor Mark Roussin last month viewed CUBE as a Hold with shares overvalued vs. its recent historical valuation .
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Extra Space Storage upgraded, CubeSmart downgraded at RayJay