A month has gone by since the last earnings report for Public Storage (PSA - Free Report) . Shares have added about 6.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is PSA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Public Storage Q1 FFO and Revenues Beat Estimates
Public Storage’s first-quarter 2018 core FFO per share of $2.48 marked 4.6% growth from the prior-year quarter figure of $2.37. The figure also surpassed the Zacks Consensus Estimate of $2.46.
Results highlight improvement in NOI from both same-store and non same-store facilities. Higher realized annual rent per occupied square foot supported the company’s same-store performance. Additionally, Public Storage benefited from its expansion efforts.
Quarterly revenues of $669.9 million also climbed 3.8% from the prior-year quarter. The figure also beat the Zacks Consensus Estimate of $668.9 million.
Behind the Headlines
Same-store revenues advanced 2.1% year over year to $549.9 million during the first quarter, while the company’s NOI inched up 1.7% to $395.9 million. The increase in same-store revenues was primarily driven by a 3.0% rise in realized annual rent per occupied square foot to $17.30. However, the weighted-average square foot occupancy of 92.3% contracted 80 basis points year over year.
In addition, the company’s NOI from non-same store facilities grew on the back of the 127 self-storage facilities acquired and developed since January 2016.
In the reported quarter, Public Storage bought two self-storage facilities, comprising 0.2 million net rentable square feet of area, for $18 million. As of Mar 31, 2018, the company was under contract to acquire three self-storage facilities, spanning 0.2 million net rentable square feet of space, for $19 million.
Finally, as of Mar 31, 2018, the company had several facilities in development (2.7 million net rentable square feet), with an estimated cost of $381 million, as well as expansion projects (2.3 million net rentable square feet) worth roughly $281 million. Public Storage estimates to incur the remaining $382 million of development costs related to these projects mainly over the next 18 months.
Public Storage exited first-quarter 2018 with around $363.0 million of cash and cash equivalents, down from $433.4 million recorded at the end of the prior quarter.
On Apr 25, Public Storage’s board of trustees announced a regular quarterly dividend of $2.00 per share. The amount will be paid on Jun 28 to shareholders of record as of Jun 13, 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, PSA has a subpar Growth Score of D. Its Momentum is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Estimates have been trending upward for the stock and the magnitude of this revision looks promising. Notably, PSA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.