Truist Securities has adjusted its outlook on Extra Space Storage (NYSE: NYSE:EXR), increasing the price target to $167 from the previous $152, while maintaining a Hold rating on the stock.
The firm's analyst has revised the forecast for the company's 2024 funds from operations (FFO) per share to $8.09, a slight increase from the earlier estimate of $8.05. The 2025 FFO per share estimate remains unchanged at $8.38.
The new price target is based on a net asset value (NAV) per share of $154.22, calculated using a capitalization rate of 5.35%, and a discounted cash flow (DCF) per share of $166.96, which incorporates a 3.5% terminal growth rate and an 8.78% discount rate.
The analyst's report includes expectations for the company's same-store revenue (SSREV), projecting a decline of approximately 0.7% in the third quarter of 2024. This trend is anticipated to continue into the fourth quarter of the same year with an identical decline in SSREV.
Truist Securities' updated analysis reflects a meticulous evaluation of Extra Space Storage's financial prospects, taking into account various factors such as projected FFO per share, SSREV trends, and valuation models like NAV and DCF. The decision to maintain the Hold rating suggests that while the analyst sees improved value in the stock, they do not necessarily advocate for a strong buying position at this time.
InvestingPro Insights
As Extra Space Storage (NYSE:EXR) garners attention following Truist Securities' updated price target, InvestingPro data and tips provide additional context to the company's financial landscape. With a robust market capitalization of $36.65 billion and a high P/E ratio of 43.32, reflecting market confidence, EXR demonstrates significant industry presence. Notably, the company's revenue growth is impressive, with a 55.85% increase over the last twelve months as of Q2 2024, and a gross profit margin of 74.3%, indicating strong operational efficiency.
InvestingPro Tips highlight that EXR has raised its dividend for 14 consecutive years and maintained dividend payments for 21 consecutive years, underscoring a reliable income stream for investors. Additionally, the company's liquid assets surpassing short-term obligations suggest financial resilience. For those seeking more in-depth analysis, InvestingPro offers 9 additional tips on EXR, available through the InvestingPro platform.
As investors consider the Hold rating from Truist Securities, these insights may serve as a valuable supplement, offering a broader understanding of Extra Space Storage's position in the Specialized REITs industry and its financial health.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.