With a market cap of $36.2 billion, Salt Lake City, Utah-based Extra Space Storage Inc. (EXR) is the largest operator of self-storage properties in the United States, with over 3,700 locations across 42 states and Washington, D.C. The company manages approximately 283 million square feet of rentable space under its Extra Space, Life Storage, and Storage Express brands.

Shares of Extra Space Storage have slightly lagged behind the broader market over the past 52 weeks. EXR has risen nearly 32% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 32.6%. In 2024, shares of EXR are up 6.6%, compared to SPX’s 26.5% gain on a YTD basis.

However, the self-storage facility REIT has outpaced the Real Estate Select Sector SPDR Fund’s (XLRE) 21.9% return over the past 52 weeks. But, the stock has underperformed XLRE’s 12.3% YTD return. 

Despite reporting stronger-than-expected Q3 FFO per share of $2.07 and revenue of $824.8 million on Oct. 29, shares of Extra Space Storage fell marginally the next day due to concerns over a decline in same-store revenues and a decrease in same-store net operating income (NOI). Interest expenses increased by 16.2% year-over-year, reaching $142.9 million, adding pressure on profitability. The lowered guidance for same-store NOI growth, projected to be negative for the full year, also contributed to the decline in stock price.

For the current fiscal year, ending in December, EXR is expected to report an FFO per share of $8.09, reflecting a marginal year-over-year decline. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion. 

Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” 10 “Holds,” one “Moderate Sell,” and one “Strong Sell.”

On Nov. 25, Scotiabank lowered Extra Space Storage's price target to $167 and maintained an “Underperform” rating, citing inflation-driven increases in Treasury yields and concerns over REITs appearing historically expensive relative to real economic yields.

As of writing, EXR is trading below the mean price target of $175.12. The Street-high price target of $198, implies a potential upside of 15.8% from the current price.