Michael Mueller, an analyst from J.P. Morgan, has initiated a new Buy rating on SmartStop Self Storage REIT, Inc. (SMA).
Michael Mueller’s rating is based on several compelling factors. SmartStop Self Storage REIT, Inc. is positioned with a unique market presence, operating both in the U.S. and the Greater Toronto Area, which sets it apart from its peers. The company’s valuation appears attractive, particularly when considering its implied cap rate, which suggests it is undervalued compared to similar companies. Additionally, the potential for above-average growth in net operating income (NOI), partly driven by its Canadian operations, adds to the positive outlook.
Furthermore, SmartStop’s management is optimistic about future acquisition opportunities, which could enhance its market scale. Despite the risks associated with its non-traditional managed REIT platform, which relies heavily on fee and interest income from speculative private capital, the prospects for significant earnings growth remain strong. This platform is expected to contribute notably to the company’s funds from operations (FFO) growth, despite the inherent risks. Overall, these factors contribute to the Buy rating, as they suggest a promising growth trajectory for SmartStop Self Storage REIT, Inc.
In another report released today, Stifel Nicolaus also initiated coverage with a Buy rating on the stock with a $40.00 price target.
Based on the recent corporate insider activity of 7 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SMA in relation to earlier this year.