Yahoo Finance What's in Store for Extra Space Storage (EXR) in Q4 Earnings?
Extra Space Storage EXR is slated to report fourth-quarter and full-year 2022 results on Feb 22 after market close. Its quarterly revenues and core funds from operations (FFO) per share are likely to have witnessed year-over-year increases.
In the last reported quarter, this Salt Lake City, Utah-based self-storage real estate investment trust (REIT) delivered a surprise of 1.38% in terms of core FFO per share. Results reflected a better-than-anticipated top line.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on each occasion, the average beat being 4.14%. 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 before this announcement.
Factors to Consider
In the fourth quarter, Extra Space Storage is likely to have continued to benefit from its solid presence in key cities and measures to boost the company’s geographical footprint through accretive acquisitions and third-party management.
High brand value and technological advantage are expected to have aided EXR’s top and bottom lines in the quarter under consideration. Also, this REIT is likely to have maintained a healthy balance sheet position.
Amid these, Extra Space Storage is likely to have seen growth in revenues in the quarter to be reported. However, with the impact of the pandemic abating, vacancy is likely to increase. The consensus mark for fourth-quarter same-store square foot occupancy is expected to have been 93.75%, down from 95.20% in the prior quarter and 95.30% in the year-ago period. Moreover, with a return of seasonality, rates and occupancy are likely to experience some pressure.
The Zacks Consensus Estimate of $429.52 million for quarterly property rental revenues suggests a slight increase from the prior quarter’s $428.79 million and the year-ago period’s $364.54 million. Management and franchise fees for the quarter are projected at $21.99 million, indicating a decline from the prior quarter’s $22.25 million but ahead of the year-ago quarter’s $18.94 million. The Zacks Consensus Estimate of $495.4 million for quarterly revenues suggests a 15.92% increase year over year.
Extra Space Storage’s activities during the quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has moved a cent north to $2.08 in the past week. It also calls for an 8.9% year-over-year rise.
However, EXR 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. Rising interest rates add to its woes.
For the full-year 2022, Extra Space Storage expected core FFO per share in the range of $8.30-$8.40. The company’s full-year assumption is backed by a projection of 16.25-17.25% growth in same-store revenues and an 18.5-20% increase in same-store NOI.
For the full year, the Zacks Consensus Estimate for the core FFO per share is pegged at $8.42. The figure indicates a 21.85% increase year over year on 20.91% year-over-year growth in revenues to $1.91 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model predicts a surprise in terms of FFO per share for Extra Space Storage this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.
Extra Space Storage currently carries a Zacks Rank of 3 and has an Earnings ESP of +4.01%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are some other stocks from the broader REIT sector — VICI Properties Inc. VICI and Park Hotels & Resorts Inc. PK — that you may want to consider as our model shows that these too have the right combination of elements to report a surprise this quarter.
VICI Properties, slated to release quarterly numbers on Feb 23, has an Earnings ESP of +0.29% and carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Park Hotels & Resorts, scheduled to report quarterly numbers on Feb 22, currently has an Earnings ESP of +3.66% and carries a Zacks Rank of 3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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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Extra Space Storage Inc (EXR) : Free Stock Analysis Report
Park Hotels & Resorts Inc. (PK) : Free Stock Analysis Report
VICI Properties Inc. (VICI) : Free Stock Analysis Report
