Analyst Note| Yousuf Hafuda |
Extra Space Storage reported excellent fourth-quarter results, with the self-storage industry finally vindicating its previously acquired reputation for countercyclicality and resilience. These positive results caused the firm’s shares to rise by around 5%. Extra Space Storage reported fourth-quarter core funds from operations, or FFO, of $1.48 per share, a 16.5% increase as compared with the third quarter of 2019, with a large portion of this increase coming from external growth. Meanwhile, same-store revenue increased by 2.3% while same-store net operating income increased by 3.4%. Although we are impressed by these results, we still think supply remains an issue for the industry and have maintained our $83 per share fair value estimate for no-moat Extra Space Storage.