On the release of first-quarter 2009 operating results that were weaker than expected, KeyBanc has downgraded the stock of Extra Space Storage Inc. to “underweight” from “hold.” It has also downgraded shares of Public Storage Inc., though the company will not report its results until later this week.
 
In regard to Extra Space, KeyBanc said results “pointed to a sharper deterioration across the self-storage sector, as full year guidance was meaningfully reduced. In addition, the company had little good news to announce on the capital-raising front to act as a counterbalance to the weaker than anticipated core.” KeyBanc said it is downgrading Extra Space shares to reflect the downside surprise and likelihood of further deterioration, as well as the less attractive valuation.
 
The firm is also downgrading shares of Public Storage from “underweight” to “hold” for similar reasons, saying the stock remains the most expensive in the self-storage sector and will likely see a similar attrition in core operating performance when the company reports its first-quarter operating results.
 
KeyBanc is establishing a downside price target of $6.50 per share for Extra Space and $56 per share for Public Storage.

Extra Space and Public Storage are real estate investment trusts that own, operate, manage, acquire and develop self-storage facilities.

Source: StreetInsider.com, KeyBanc Downgrades Self Storage Stocks Extra Space Storage (EXR) and Public Storage (PSA) to Underweight

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