Assessing Public Storage (PSA) Valuation After A Recent Pullback In Returns

Why Public Storage Is Drawing Fresh Attention

Public Storage (PSA) is back on investors’ radar after a recent pullback in the share price and mixed short term returns, prompting fresh questions about how its self storage REIT profile stacks up today.

See our latest analysis for Public Storage.

At a latest share price of $265.68, Public Storage has seen a 90 day share price return of 9.64% decline and a 1 year total shareholder return of 6.29% decline, suggesting momentum has cooled after earlier gains over the past five years.

If PSA’s recent pullback has you reassessing your watchlist, it could also be a useful moment to scan fast growing stocks with high insider ownership for other ideas with strong backing from insiders.

With PSA trading at $265.68, showing a 90-day total return of a 9.64% decline and a 1-year total return of a 6.29% decline despite positive revenue and net income growth, is this a reset that creates a buying opportunity, or is the market already pricing in future growth?

Most Popular Narrative Narrative: 16.7% Undervalued

The most followed narrative sees Public Storage’s fair value at about $319 a share versus the recent $265.68 price, framing the current pullback as a discount to its long term cash flow potential.

Strategic portfolio expansion, including $1.1 billion in recent acquisitions/development and successful lease-up of new and non-same-store assets, is expected to drive future revenue and NOI growth, positioning the company to benefit from ongoing industry consolidation and market share gains.

Read the complete narrative.

Want to see what turns those expansion plans into a higher valuation multiple? Revenue curves, margin assumptions, and a richer earnings base all sit at the center of this narrative.

This narrative applies a discount rate of 7.57% to Public Storage’s projected earnings and cash flows, then compares the implied value with today’s price. It leans on moderate revenue growth, improving profit margins and a forward P/E multiple that sits above the broader specialized REIT group, reflecting confidence in long term net operating income trends and consolidation benefits.

Result: Fair Value of $319 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on supply staying in check and costs not eating into margins, with oversupply and rising property and insurance expenses both representing real swing factors.

Find out about the key risks to this Public Storage narrative.

Build Your Own Public Storage Narrative

If you interpret the numbers differently or want to assess the assumptions on your own, you can create a custom view in just a few minutes by starting with Do it your way.

A great starting point for your Public Storage research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

PSA might be your starting point, but you do not want to miss other opportunities that fit your style, so widen your search with a few focused screens.

• Spot companies that pair income potential with balance sheet support by reviewing these 12 dividend stocks with yields > 3% that may complement a steadier core holding like Public Storage.
• Target potential mispricings by scanning these 887 undervalued stocks based on cash flows that could sit at the intersection of solid fundamentals and more attractive entry points.
• Pursue growth stories tied to long term technology shifts by checking these 26 AI penny stocks that may benefit from rising demand for AI driven solutions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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