Extra Space (EXR) Stock Rating Cut at BMO Capital
Bloomberg News
NEW YORK (TheStreet) -- Extra Space Storage (EXR) - Get Report stock was downgraded to "market perform" from "outperform" at BMO Capital Markets on Friday morning.
The firm also lowered its price target to $98 from $101 on shares of the Salt Lake City-based real estate investment trust.
The new rating and price target are based on valuation.
"We're wary about downgrading Extra Space given its exceptionally strong management team and bright prospects in the Self-Storage industry that we believe should continue to do well. On the other hand, EXR's absolute valuation seems fair...ditto for relative valuation," BMO wrote in an analyst note.
The firm knows storage REITs are increasing exposure to ground-up development. But BMO does not have reliable industry development stats, which along with "questionable" anecdotal evidence and conflicting management statements will likely increase volatility for the sector.
"We run the risk of being early, especially considering that adding solar generation, efficient lighting and motion-sensitive switches should continue to keep a lid on expenses while rent growth continues given strong demand and high occupancies industry-wide," the firm added.
Shares of Extra Space are higher by 0.33% to $92.34 on Friday morning.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on the stock.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: EXR