Stock Price & Analysis

Based on the analysis of Public Storage (PSA) stock, it is currently undervalued with a moderate buy rating from analysts and shows signs of potential upside. Consider buying PSA stock as it may offer long-term growth opportunities.

PSA stock is predicted to reach a price of $310 by the end of 2025, driven by improving revenue growth and a Moderate Buy consensus among analysts. The stock faces resistance at $327, with support at $292 based on Fibonacci levels.

The S1 support level for PSA Stock is $288.31 ,The R1 resistant level for PSA Stock is $300.7.

As of the end of day on 2025-04-02, the price of PSA Stock was $297.31.

The target price for PSA Stock according to analyst rating is 327.91, with the highest price target at 354.00 and the lowest at 299.00. Analysts have a Moderate Buy rating on PSA Stock overall.

The market cap of PSA is $52.4B.

Analysis and Insights

To determine whether Public Storage (PSA) is overvalued, we analyze its valuation metrics, financial performance, and market trends.

Valuation Metrics:

PSA's current valuation metrics suggest it may be overvalued compared to industry averages. The stock's price-to-earnings (P/E) ratio of 26.34 is slightly below the industry average of 30, indicating reasonable valuation on an earnings basis. However, the EV/EBITDA ratio of 32.79 is significantly higher than the industry average of 20-25, signaling potential overvaluation relative to earnings and debt levels. Additionally, the price-to-sales (P/S) ratio of 13.7 exceeds the industry average of 10-12, further supporting the overvaluation thesis.

Financial Performance:

PSA reported strong revenue growth, with Q4 2024 revenue of $1.18 billion, up from $1.16 billion in the previous year. However, the company's FFO (Funds From Operations) guidance for 2025 fell short of consensus estimates, contributing to a 1.3% year-to-date decline in the stock price. Despite this, PSA maintains a strong balance sheet and operational efficiency, with a dividend yield of 2.41%, though this is below the industry average of 3-4%.

Market Trends and Analyst Sentiment:

PSA has underperformed its peer Extra Space Storage (EXR) over the past year, with a 6.1% gain compared to EXR's 6.6% increase. Analysts have mixed opinions, with a consensus "Moderate Buy" rating and an average price target of $327.91, suggesting a potential upside of 8.1% from current levels. However, recent price target reductions by firms like Truist and Barclays reflect concerns about soft demand and supply pressures in the self-storage sector.

Technical Analysis:

PSA's stock price has been trading below its 50-day and 200-day moving averages since early March, indicating a bearish trend. The RSI of 38.99 suggests the stock is not oversold, but the MACD remains negative, reinforcing the bearish momentum.

Conclusion:

While PSA is not significantly overvalued on a P/E basis, its elevated EV/EBITDA and P/S ratios compared to industry averages suggest some overvaluation. The stock's underperformance relative to peers and bearish technical indicators further support this view. Investors should consider waiting for a price correction or improved industry fundamentals before entering the market.

Public Storage is a real estate investment trust (REIT). The Company is engaged in the ownership, development, and operation of self-storage facilities and other related operations including tenant reinsurance and third-party self-storage management. It offers storage spaces for lease on a month-to-month basis, for personal and business use. Its segments include Self-Storage Operations and Ancillary Operations. The Self-Storage Operations segment includes the aggregated rental operations from the self-storage facilities it owns from same store facilities, acquired facilities, developed, and expanded facilities, and other non-same store facilities. The Ancillary Operations segment includes combined operations of its tenant reinsurance, merchandise sales, and third party property management segments. It has interests in and consolidated approximately 3,044 self-storage facilities (an aggregate of 218 million net rentable square feet of space) operating under the Public Storage name.

PSA stock is predicted to reach $350 by 2030, driven by continued industry consolidation and strong financials. The stock is supported by a solid balance sheet and high dividend yield, with analysts maintaining a Moderate Buy rating. PSA's digital transformation and market leadership position it well for long-term growth.

PSA has a total of 5380 employees.