Evercore ISI has adjusted its outlook on National Storage Affiliates Trust (NYSE: NYSE:NSA), decreasing the price target from $40.00 to $38.00, while maintaining an Underperform rating on the stock.
The revision, which came on Tuesday, follows the company's second-quarter financial performance, which showed funds from operations (FFO) at $0.62 per share, missing the consensus estimate by $0.01 and Evercore ISI's projection by $0.02.
The company's same-store net operating income (SS NOI) declined by 5.6%, which was slightly above Evercore ISI's anticipated drop of 6.7%. This was attributed to revenue falling at a slower rate of 2.8% compared to the predicted 3.3%, and a lower-than-expected expense growth of 4.8%, against the forecasted 6.3%. Despite these figures being better than projected, the shortfall in FFO was mainly due to increased interest expenses.
National Storage Affiliates Trust also revised its full-year 2024 core FFO outlook downwards by approximately 3.2% at the midpoint, reducing the range from $2.40 - $2.56 to $2.36 - $2.44. This updated guidance is below the consensus estimate of $2.48 and Evercore ISI's own revised estimate of $2.38.
In addition to the core FFO revision, the company's SS NOI guidance for the fiscal year was reduced by 150 basis points at the midpoint to -5.5%. This is in line with Evercore ISI's new forecast of a 5.9% decline.
The revised SS revenue growth is now expected to shrink by 3.0%, a 100 basis point decrease from previous estimates, while expense growth is projected to be 4.25%, slightly above Evercore ISI's new forecast of 4.2%.
National Storage Affiliates Trust recently elected Michael Schall to its Board of Trustees, a development that involves his participation in the Audit and Finance Committees. Schall's appointment is seen as a significant asset for the firm's strategic growth, given his extensive executive leadership background and previous board experiences.
His industry expertise is backed by his tenure at Essex Property Trust (NYSE:ESS), where he served in various roles, including President and CEO, and his current board membership at Pebblebrook Hotel (NYSE:PEB) Trust.
InvestingPro Insights
In light of Evercore ISI's recent adjustments to the outlook on National Storage Affiliates Trust (NSA), it's pertinent to consider additional insights that may influence investor perspective. According to InvestingPro data, NSA currently boasts a market capitalization of $4.77 billion. Despite the company's challenges, InvestingPro Tips highlight that NSA has a track record of raising its dividend for 9 consecutive years, signaling a commitment to returning value to shareholders. Furthermore, the company is trading at a high Price / Book multiple of 5.1, which may reflect investor confidence in the underlying asset value of the company's real estate portfolio.
Investors should also note that NSA has experienced a strong return over the last three months, with a 17.89% price total return, and an even more impressive one-year price total return of 38.51%. This performance suggests a robust recovery in the stock's valuation over recent periods. Additionally, the company's dividend yield is currently 5.28%, which is quite attractive for income-focused investors. For those seeking a deeper dive into NSA's financial health and future prospects, InvestingPro offers more tips and data points, with over 10 additional InvestingPro Tips available at https://www.investing.com/pro/NSA.
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