UPDATE: KeyBanc Upgrades Sovran Self Storage To Buy From Hold

KeyBanc is upgrading Sovran Self Storage, Inc.

to BUY from HOLD on increased confidence that the stock will benefit from an improvement in self storage fundamentals that will lead to premium NAV growth that is not currently anticipated. Its upgrade is predicated on: a gradual improvement in the Company's Texas and Florida portfolio concentrations which account for approximately 40% of the Company's revenue; an increase in the Company's overall occupancy level, which remains 300+ basis points below the Company's optimal occupancy level; and a narrowing of the Company's discounted valuation vs. the sector and the REITs. More broadly, KeyBanc remains positive on the self storage sector and reiterates its Overweight rating. The sector's sharp recovery from the depths of the financial crisis has largely taken place without a recovery in some of the sector's demand drivers, both of which KeyBanc suspects may provide healthy tailwinds going forward if the economic recovery reaches escape velocity. KeyBanc has a $44 PT on SSS SSS is trading lower at $39.49