Skip to main content

Market Overview

Public Storage Downgraded To Sell By Goldman Sachs On Limited Upside


Public Storage (NYSE: PSA) shares are trading at a premium to peers, although the company’s growth is likely to come under pressure. Goldman Sachs’ Andrew Rosivach downgraded the rating for the company from Neutral to Sell, while maintaining the price target at $244. The analyst commented that there is limited upside to the 2016 same store revenue growth.

Public Storage’s shares are currently trading at a 24 percent premium to Goldman Sachs’ short lease term REIT coverage and at a 56 percent premium to the REIT coverage average, analyst Andrew Rosivach noted. He added, however, that a key reason for this premium had “diminished over time.”

Reasons for Downgrade

Rosivach enumerated 4 main reasons for the downgrade in rating. These are:

  • Limited upside to consensus estimates: Goldman Sachs’ 2016 FFO estimate is merely 1 percent higher than the consensus expectations, as compared to 6 percent higher in 2015 and 3 percent higher at the beginning of 2016.
  • Limited upside to revenue growth: “We believe PSA revenue growth estimates are limited as a result of both leverage and size. Due to PSA’s low leverage, outperformance in same-store growth should have a smaller impact to earnings vs. our coverage,” the analyst wrote.
  • Lower leverage: The relative balance sheet advantage that Public Storage used to enjoy has diminished considerably.
  • Valuation: While the company’s shares are trading at a premium to peers, their downside risk in a recessionary scenario would be “above other REITs in our coverage,” Rosivach commented.

Latest Ratings for PSA

Feb 2021Raymond JamesUpgradesUnderperformMarket Perform
Jan 2021BMO CapitalUpgradesUnderperformMarket Perform
Jan 2021Truist SecuritiesUpgradesHoldBuy

View More Analyst Ratings for PSA
View the Latest Analyst Ratings


Related Articles (PSA)

View Comments and Join the Discussion!

Posted-In: Andrew Rosivach Goldman SachsAnalyst Color Short Ideas Downgrades Analyst Ratings Trading Ideas

Latest Ratings

ABCMSVB LeerinkMaintains25.0
CCHWFCantor FitzgeraldMaintains8.2
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at