Hold Rating for Safestore Holdings Amid Market Challenges and Expansion Costs

John Cahill, an analyst from Stifel Nicolaus, maintained the Hold rating on Safestore Holdings (SAFE – Research Report). The associated price target was lowered to p650.00.

John Cahill has given his Hold rating due to a combination of factors related to Safestore Holdings’ current market position and future outlook. The company has shown a positive start to its financial year with improvements in key performance metrics such as occupancy rates. However, these gains are somewhat offset by higher interest costs associated with its development program, which is expected to constrain earnings per share growth in the short term.
Despite Safestore’s strong business model and management, the broader macroeconomic environment and liquidity issues in property investment markets have contributed to a sector-wide de-rating, impacting share prices. Although the company is on track with its ambitious expansion plans, the current market conditions are not favorable for an upward re-rating, leading to the continued Hold recommendation.