Public Storage (PSA – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst yesterday. Analyst Jonathan Petersen from Jefferies maintained a Buy rating on the stock and has a $351.00 price target.
Jonathan Petersen has given his Buy rating due to a combination of factors that highlight the strategic and financial benefits of Public Storage’s proposed acquisition. The acquisition of a 50% stake in Abacus Storage King represents a strategic entry into the Australian and New Zealand markets, which are currently underpenetrated compared to the U.S. This move is expected to be immediately accretive to funds from operations (FFO), with potential for further growth through platform enhancements over time.
Additionally, the deal is attractively priced, slightly above Abacus’s disclosed net tangible assets, and is expected to be funded through Aussie-denominated unsecured debt, minimizing foreign exchange risks. The Abacus portfolio, being the second-largest in the region, has a strong presence in major urban markets with significant growth potential. Public Storage’s robust balance sheet and expertise could address Abacus’s capital constraints, enabling further growth opportunities and enhancing revenue management, making this acquisition a promising venture for Public Storage.
In another report released yesterday, BMO Capital also maintained a Buy rating on the stock with a $340.00 price target.