scbarney/iStock via Getty Images
Shares of Extra Space Storage (NYSE:EXR) have been a mixed performer over the past year as the company has navigated a downturn in the self-storage business that may be nearing an end. I last covered
Extra Space Storage May Be Nearing An Inflection (Rating Upgrade)
Summary
- I am upgrading Extra Space Storage to a 'buy' as industry supply pressures ease and business fundamentals show signs of turning the corner.
- EXR's leading market position, solid balance sheet, and secure 4.5% dividend yield support my positive outlook despite recent underperformance.
- Improving occupancy, Life Storage synergies, and moderating costs position EXR for 3-4% growth next year, with the potential for resumed dividend growth.
- Interest rates remain the key risk, but with yields likely range-bound, EXR stock offers an attractive 9%+ long-term return and is now worth adding.
Over fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.