2023-05-08 13:17:36 ET
- BofA Securities analyst Jeffrey Spector downgraded National Storage Affiliates Trust ( NYSE: NSA ) to Underperform from Neutral for five key reasons, the first being its Q1 occupancy decline was worse than expected and worse than its peers.
- Other reasons for the downgrade include Spector's preference for fully integrated internally managed REIT strcture vs. NSA's internal/external Participating Regional Operator structure; downside risk to its 2023 guidance; higher leverage at 6.3x net debt-EBITDA vs. 4.4x for its peers; and a higher applied cap rate of 6.1% and discount rate to NAV of ~15%.
- Spector's Underperform rating is more bearish than the SA Quant rating and the average Wall Street analyst rating, both at Hold.
- The analyst reiterated Buy ratings on CubeSmart ( NYSE: CUBE ), Extra Space Storage ( NYSE: EXR ), and Public Storage ( NYSE: PSA ) as they delivered strong Q1 results and indicated that fundamentals improved through April. "This is important because a strong April has been tied historically to a healthy peak leasing season," Spector wrote in a note to clients.
- Meanwhile, see why Investing Group Leader Wolf Report says NSA is "starting to look good."
For further details see:
National Storage Affiliates downgraded to Underperform at BofA after Q1 results