Public Storage Earnings: Muted Self-Storage Demand Weighs on Rent Growth; 2024 Guidance Maintained

No-moat-rated Public Storage reported first-quarter results that were largely in line with our expectations as muted demand for self-storage units weighed on rental rates in many markets. The firm reported core funds from operations of $4.03 per share, 1.2% lower than the $4.08 per share FFO during the first quarter of 2023. The company maintained its 2024 full-year core FFO guidance of $16.60-$17.20 per share, representing flattish growth at the midpoint when compared with the full-year 2023 core FFO of $16.89. We have been predicting the slowdown in self-storage demand for many quarters. On a somewhat encouraging note, the current demand slowdown is relatively mild, and management commentary points to a slow recovery in the coming months. We are maintaining our $310 per share fair value estimate for Public Storage after incorporating the first-quarter results.