UPDATE 1-RESEARCH ALERT-Wachovia upgrades Public Storage
October 10th, 2008 | by admin |(Recasts, adds details)
Oct 10 (Reuters) – Wachovia Capital Markets LLC upgradedPublic Storage Inc PSA.N to “outperform” from “underperform”and said the self storage owner-operator’s secure financialposition will be a safe harbor in an uncertain credit market.
The company had the advantage of a strong credit positionwith $3.5 billion preferred equity and debt of less than $700million, all of which can be repaid with their retained cashflow, analyst Jeffrey Donnelly said in a note to clients.
Donnelly, however, reduced his FFO estimates for thecompany through 2010, anticipating a gradual slowdown instorage demand.
Consumers are under increasing pressure in a recessionaryenvironment and storage demand could come under pressure,keeping revenue growth to nominal levels, he said.
However, there could be a beneficial offset as job lossesor home foreclosures could trigger household moves and resultin demand for temporary storage, Donnelly said.
Shares of the company closed at $70.50 Thursday on the NewYork Stock Exchange. (Reporting by Antonita Madonna Devotta in Bangalore; Editingby Gopakumar Warrier)