Morgan Stanley analyst Ronald Kamdem maintained a Sell rating on National Storage Affiliates yesterday and set a price target of $30.00.
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Ronald Kamdem has given his Sell rating due to a combination of factors impacting National Storage Affiliates. The company’s core funds from operations (FFO) for the second quarter fell short of expectations by 3 cents, and the full-year guidance was revised downward to $2.20, which is 5% below the consensus estimate. Despite a slight year-over-year improvement in move-in rates, the same-store revenue and net operating income (NOI) continued to face challenges, with a decline of 3.0% and 6.1% respectively, showing little improvement during the peak leasing season.
Additionally, the full-year same-store revenue guidance was significantly reduced, and marketing expenses as a percentage of revenue increased. The payout ratio for adjusted funds from operations (AFFO) exceeded 100%, indicating potential sustainability issues. The report also highlights concerns about the timing of demand recovery, rent increases for existing tenants, and pricing for new tenants. These factors, combined with a reduced acquisition guidance and high debt levels, contribute to the negative outlook for the stock.
In another report released on July 23, Wells Fargo also maintained a Sell rating on the stock with a $35.00 price target.