PSA - Embedded Expectations Analysis - 2021 02 22
Public Storage (PSA:USA) currently trades at historical highs relative to UAFRS-based (Uniform) earnings, with a 38.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, and management may be concerned about rent growth, move-in and move-out volumes, and the sustainability of storage demandSpecifically, management may lack confidence in their ability to maintain long-term tenant renewals, drive rent growth through new tenant rent increases, and sustain increased move-in activity. Moreover, they may have concerns about the rent impact of declining move-out activity, the sustainability of storage demand, and seasonal customer payment patterns. Furthermore, they may lack confidence in their ability to sustain occupancy improvements for storage facilities, and they may have concerns about the pace of the market recovery the sustainability of lower auction volume
Public Storage is a real estate investment trust. The company's business activities include: Self-storage Operations, which acquires, develops, owns and operates self-storage facilities that provide storage spaces for lease on a month-to-month basis, for personal and business use; Ancillary Operations, which reinsures policies against losses to goods stored by customers in the company's self-storage facilities and sells merchandise, mainly locks and cardboard boxes, at its self-storage facilities; and Investment in PS Business Parks Inc. (PSB), in which the company has an equity interest in PSB that owns, operates, acquires and develops commercial properties, mainly multi-tenant flex, office, and industrial parks.
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