NEW YORK (TheStreet) -- Sovran Self Storage (SSS) shares are up 1.05% to $90.81 in early market trading on Friday after the real estate investment trust had its rating upgraded to "buy" from "neutral" by analysts at UBS before the opening bell today.
The Williamsville, NY-based company's price target was also raised to $100 from $96, representing a potential 11.3% upside from the stock's previous closing price.
Analysts at the firm said that Sovran is still currently trading at a discount even as the consensus estimates for the company's outlook are set to move higher in the coming weeks.
The company last reported its quarterly financial results two weeks ago, matching analysts earnings and revenue expectations of $1.09 per diluted share on $85.4 million in revenue. The company also said it expects full year operational earnings to be between $4.79 and $4.85 per share.
TheStreet Ratings team rates SOVRAN SELF STORAGE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOVRAN SELF STORAGE INC (SSS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SSS's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SOVRAN SELF STORAGE INC has improved earnings per share by 27.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SOVRAN SELF STORAGE INC increased its bottom line by earning $2.66 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.66).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 34.6% when compared to the same quarter one year prior, rising from $16.67 million to $22.45 million.
- 36.87% is the gross profit margin for SOVRAN SELF STORAGE INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 26.08% trails the industry average.
- You can view the full analysis from the report here: SSS Ratings Report