Sovran Self Storage Shares Fall As BMO Downgrades
Benzinga 10 years ago
Analyst ColorLong IdeasNewsREITDowngradesPrice TargetAnalyst RatingsMoversTrading IdeasReal Estate
BMO Capital Markets' Paul Adornato downgraded Sovran Self Storage Inc (NYSE: SSS) from Outperform to Market Perform while increasing the price target from $114.00 to $120.00.
"We still believe the Self Storage REIT sector will likely experience strong internal growth throughout 2016 and into 2017," the analyst stated. Adornato cited strong occupancies heading into the busy season and projected healthy rent increases for strong REIT sector growth.
Related Link: Credit Suisse On REIT STocks: NYC/East Coast Will Outperform West Coast
'Discount to Premium'
Adornato notes, however, that "the risk/reward profile of SSS has shifted as the stock's valuation relative to the REIT universe has risen from discount to premium." The company's discount relative to storage REIT peers has narrowed from 13 percent to 11.5 percent according to the analyst.
In response to these concerns, Adornato recommended sticking to best-in-class names such as Extra Space Storage, Inc. (NYSE: EXR) and CubeSmart (NYSE: CUBE).
In Wednesday's pre-market, Sovran Self Storage was down 2.59 percent.