Extra Space Storage (EXR) Price Target Cut as Wells Fargo Flags Sector Caution

Extra Space Storage Inc. (NYSE:EXR) is included among the 14 Best Real Estate Stocks to Buy According to Hedge Funds.

On February 5, Wells Fargo lowered its price recommendation on Extra Space Storage Inc. (NYSE:EXR) to $150 from $160. The firm reiterated an Overweight rating on the shares. The firm said it remained somewhat cautious on the storage REIT sector, noting that stocks had already climbed about 9% year-to-date on optimism tied to housing trends. However, it warned that 2026 outlooks could come in slightly below Street expectations.

During the company’s Q4 2025 earnings call, CEO Joseph Margolis said Extra Space delivered core FFO growth of 2.5% for the quarter and 1.1% for the full year. He acknowledged that operating conditions and supply pressures were still challenging but noted that the environment had begun to improve. Margolis highlighted encouraging signs across the business. He said 16 of the company’s top 20 markets posted year-over-year gains in move-in rates, pointing to improving customer demand. Revenue trends also strengthened sequentially, helping same-store revenue return to growth, rising 0.4% during the quarter.

He also emphasized the company’s disciplined approach to capital allocation. During the period, Extra Space repurchased about $141 million of its own shares, acquired 27 operating properties for $305 million, and issued $80 million in bridge loans. Margolis said the company’s broad external growth platform continued to create opportunities across different channels and positioned it well to expand compared with many of its peers.

CFO Jeff Norman said the company also made progress on the expense side. Same-store operating costs rose just 1.1%, reflecting improved cost control. Property taxes declined 3.4% as prior increases began to normalize, while property operating expenses, including utilities, dropped more than 5%.

He added that these savings were partly offset by higher healthcare costs and increased marketing spending. However, he explained that the additional marketing investment helped drive stronger move-in activity and supported the company’s efforts to build revenue momentum heading into 2026.

Extra Space Storage Inc. (NYSE:EXR) is a self-storage REIT that owns, operates, and manages storage properties. It also provides lending, acquisitions, and development services, offering flexible month-to-month storage options for both personal and business customers.

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