Should PSA Stock Be in Your Portfolio Pre-Q4 Earnings?

Public Storage PSA is slated to release fourth-quarter 2025 results on Feb. 12, after market close. The quarterly results are expected to reflect an increase in revenues and no change in core funds from operations (FFO) per share.

In the last reported quarter, this self-storage real estate investment trust (REIT) reported a core FFO per share of $4.31, surpassing the Zacks Consensus Estimate of $4.24. Results were backed by higher realized annual rent per occupied square foot, though a fall in occupancy partly offset the upside.

Over the last four quarters, Public Storage surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average surprise being 0.96%. The graph below depicts the surprise history of the company:

Public Storage Price and EPS Surprise

Public Storage price-eps-surprise | Public Storage Quote

Factors at Play and Projections for PSA’s Q4 Results

Public Storage is expected to have continued benefiting from its well-established brand in the self-storage industry and presence across major U.S. metropolitan markets with high population density. Along with strong brand recognition, the company is likely to have gained from economies of scale.

The self-storage asset category is need-based and recession-resilient in nature, with low capital expenditure requirements and high operating margins. Acquisitions and expansionary efforts are contributing to the growth.

The Zacks Consensus Estimate for fourth-quarter revenues from self-storage facilities stands at $1.13 billion. This suggests an increase from the $1.10 billion witnessed in the year-ago period. The consensus mark for quarterly revenues from ancillary operations stands at $84.1 million, up from the $77.3 million registered in the comparable period last year.

The company is utilizing technology to optimize revenues and improve cost efficiency, which is likely to have supported stable FFO in the quarter under review.

The Zacks Consensus Estimate for quarterly revenues stands at $1.21 billion. This indicates a 2.7% year-over-year increase.

PSA’s activities during the quarter under review were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the fourth-quarter core FFO per share has been revised southward marginally to $4.21 over the past month. It indicates no change year over year.

Here Is What Our Quantitative Model Predicts for PSA:

Our proven model does not conclusively predict a surprise in terms of FFO per share for Public 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 not the case here.

Public Storage currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of -0.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Federal Realty Investment Trust FRT and Host Hotels & Resorts HST — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Federal Realty, slated to release quarterly numbers on Feb. 12, has an Earnings ESP of +0.90% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Host Hotels, scheduled to report quarterly numbers on Feb. 18, has an Earnings ESP of +1.71% and carries a Zacks Rank of 3.

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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This article originally published on Zacks Investment Research (zacks.com).

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