UPDATE: Morgan Stanley Upgrades Public Storage, Says Company Should Benefit From Pricing Power

In a report published Tuesday, Morgan Stanley analyst Landan Park upgraded Public Storage PSA to Equal-weight from Underweight, raising its price target from $132.00 to $160.00. According to the report, record occupancy suggests PSA should benefit from pricing power in 4Q13 and 2014 and PSA's strong balance sheet allows for ongoing accretive acquisitions. This is balanced by potential expense growth and modest multiple contraction ahead. “Near peak occupancy levels should drive pricing power in 2014 and our model reflects an uptick in rents by 5% y/y from the 3% seen during the past few quarters, in line with prior cycles,” the report noted. “In addition, PSA's cost of capital advantage versus private peers and multiple sources of funding should enable continued accretive external growth in 2014.” PSA closed Monday at $153.96.