The firm lowered its rating on the a real estate investment trust to "hold" from "buy" with a price target of $199.50 on a valuation call.
Cantor analysts said rent growth is expected to be in-line with its peers.
The firm also noted limited potential in occupancy upside.
Glendale, Calif.-based Public Storage is a REIT that acquires, develops, owns and operates self-storage facilities, which offer storage spaces for lease, on a month-to-month basis, for personal and business use.
Separately, TheStreet Ratings team rates PUBLIC STORAGE as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PUBLIC STORAGE (PSA) 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, growth in earnings per share, increase 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:
- PSA's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- PUBLIC STORAGE has improved earnings per share by 21.8% 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, PUBLIC STORAGE increased its bottom line by earning $5.25 versus $4.89 in the prior year. This year, the market expects an improvement in earnings ($5.75 versus $5.25).
- 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 24.0% when compared to the same quarter one year prior, going from $227.20 million to $281.78 million.
- 48.07% is the gross profit margin for PUBLIC STORAGE which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 48.06% significantly outperformed against the industry average.
- You can view the full analysis from the report here: PSA Ratings Report