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Factors to Impact Extra Space Storage's (EXR) Q2 Earnings
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Extra Space Storage (EXR - Free Report) is slated to report second-quarter 2021 earnings on Jul 27, after the bell. Both its quarterly revenues and funds from operations (FFO) per share are likely to display year-over-year increases.
In the last reported quarter, this Salt Lake City, UT-based self-storage real estate investment trust (REIT) delivered a surprise of 0.67% in terms of FFO per share. Results reflected strong average occupancy and higher average rates to customers for the quarter.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on each occasion, the average beat being 5.50%. The graph below depicts this surprise history:
Let’s see how things have shaped up prior to this announcement.
Factors to Consider
In the second quarter, Extra Space Storage is likely to have benefited from its solid presence in key cities and measures to boost the company’s geographical footprint through accretive acquisitions and third-party management.
The self-storage industry continues to gain from favorable demographic changes. Migration and downsizing trend, and increase in the number of people renting homes have escalated the needs of consumers to rent spaces at storage facilities for parking their possessions.
Further, demand for self-storage space is shooting up in the flexible working environment as well as improving housing market, while move-outs remain low amid the health crisis, resulting in improved year-over-year occupancy trends. Earlier, management had also noted that REIT’s record-high occupancy is resulting in greater pricing power. Existing customer rate hikes are likely to have been a tailwind in second-quarter 2021 as they were paused during much of second-quarter 2020.
Amid these, the REIT is likely to have seen growth in revenues in the quarter to be reported with healthy rental rates.
Management and franchise fees for the quarter are projected at $15.51 million, indicating an improvement from the prior-year quarter’s $12.86 million. The Zacks Consensus Estimate of $316 million for quarterly property rental revenues suggests an increase from the first quarter’s $304 million and the year-ago period’s $279 million. The Zacks Consensus Estimate of $374.6 million for quarterly revenues suggests a 14.45% increase year on year.
Extra Space Storage’s activities during the quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised marginally north to $1.55 in a month’s time. It also calls for a 26% year-over-year rise.
Nevertheless, the company operates in a highly fragmented market in the United States, with intense competition from numerous private, regional and local operators. In addition, there is a development boom of self-storage units in several markets. This high supply is likely to have fueled competition.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Extra Space this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Extra Space currently carries a Zacks Rank #2 (Buy) and has an Earnings ESP of -0.05%.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Digital Realty Trust, Inc. (DLR - Free Report) , scheduled to report quarterly numbers on Jul 29, currently has an Earnings ESP of +0.63% and carries a Zacks Rank of 3.
Public Storage (PSA - Free Report) , slated to announce second-quarter results on Aug 3, currently has an Earnings ESP of +0.69% and carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Factors to Impact Extra Space Storage's (EXR) Q2 Earnings
Extra Space Storage (EXR - Free Report) is slated to report second-quarter 2021 earnings on Jul 27, after the bell. Both its quarterly revenues and funds from operations (FFO) per share are likely to display year-over-year increases.
In the last reported quarter, this Salt Lake City, UT-based self-storage real estate investment trust (REIT) delivered a surprise of 0.67% in terms of FFO per share. Results reflected strong average occupancy and higher average rates to customers for the quarter.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on each occasion, the average beat being 5.50%. The graph below depicts this surprise history:
Extra Space Storage Inc Price and EPS Surprise
Extra Space Storage Inc price-eps-surprise | Extra Space Storage Inc Quote
Let’s see how things have shaped up prior to this announcement.
Factors to Consider
In the second quarter, Extra Space Storage is likely to have benefited from its solid presence in key cities and measures to boost the company’s geographical footprint through accretive acquisitions and third-party management.
The self-storage industry continues to gain from favorable demographic changes. Migration and downsizing trend, and increase in the number of people renting homes have escalated the needs of consumers to rent spaces at storage facilities for parking their possessions.
Further, demand for self-storage space is shooting up in the flexible working environment as well as improving housing market, while move-outs remain low amid the health crisis, resulting in improved year-over-year occupancy trends. Earlier, management had also noted that REIT’s record-high occupancy is resulting in greater pricing power. Existing customer rate hikes are likely to have been a tailwind in second-quarter 2021 as they were paused during much of second-quarter 2020.
Amid these, the REIT is likely to have seen growth in revenues in the quarter to be reported with healthy rental rates.
Management and franchise fees for the quarter are projected at $15.51 million, indicating an improvement from the prior-year quarter’s $12.86 million. The Zacks Consensus Estimate of $316 million for quarterly property rental revenues suggests an increase from the first quarter’s $304 million and the year-ago period’s $279 million. The Zacks Consensus Estimate of $374.6 million for quarterly revenues suggests a 14.45% increase year on year.
Extra Space Storage’s activities during the quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised marginally north to $1.55 in a month’s time. It also calls for a 26% year-over-year rise.
Nevertheless, the company operates in a highly fragmented market in the United States, with intense competition from numerous private, regional and local operators. In addition, there is a development boom of self-storage units in several markets. This high supply is likely to have fueled competition.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Extra Space this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Extra Space currently carries a Zacks Rank #2 (Buy) and has an Earnings ESP of -0.05%.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Duke Realty Corp. , slated to release second-quarter earnings on Jul 28, has an Earnings ESP of +0.47% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Digital Realty Trust, Inc. (DLR - Free Report) , scheduled to report quarterly numbers on Jul 29, currently has an Earnings ESP of +0.63% and carries a Zacks Rank of 3.
Public Storage (PSA - Free Report) , slated to announce second-quarter results on Aug 3, currently has an Earnings ESP of +0.69% and carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.