Extra Space Storage to Post Q4 Earnings: What's in the Cards?

Extra Space Storage EXR, a leading self-storage real estate investment trust (REIT) in the United States, is set to release its fourth-quarter and full-year 2024 results on Feb. 25, after market close. As the market anticipates the earnings announcement, this article provides an in-depth preview of EXR’s expected performance in the fourth quarter, considering overall industry trends, the company’s growth strategy and acquisitions.See the Zacks Earnings Calendar to stay ahead of market-making news.In the last reported quarter, this Salt Lake City, UT-based REIT delivered a surprise of 1.97% in terms of core FFO per share. The results reflected a rise in occupancy and better-than-anticipated revenues.Over the trailing four quarters, the company beat the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average surprise being 1.25%. 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 Factors to Consider Ahead of EXR’s ResultsIn the fourth quarter, Extra Space Storage is likely to have continued benefiting from its strong presence in key cities and efforts to expand through accretive acquisitions, mutually beneficial joint venture partnerships and third-party management services.EXR's continued emphasis on enhancing the customer experience through technology integration and operational improvements is likely to have bolstered its competitive edge. Its strong brand reputation and technological advancements are expected to have supported performance during the quarter. This REIT is likely to have sustained a healthy balance sheet throughout the period.However, the company continues to see new customer price sensitivity and is likely to face headwinds from lower new customer rates in the near term. As such, the reacceleration in revenue growth is expected to be challenging until the company regains pricing power with new customers.Further, high interest expenses are expected to have cast a pall on the company’s performance to some extent.Q4 Projections for EXRThe Zacks Consensus Estimate of $702 million for quarterly property rental revenues suggests an increase from the year-ago period’s $697 million. The consensus estimate for revenues from tenant insurance of $83.5 million implies an increase from $70.4 million in the year-ago period.The Zacks Consensus Estimate of $831.5 million for quarterly revenues suggests a 4.2% increase year over year.However, the consensus mark for management and franchise fees for the quarter are projected at $30.1 million, down from $30.4 in the year-ago period.Further, we estimate an 5.1% year-over-year increase in interest expenses in the fourth quarter.Extra Space Storage’s activities during the quarter were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has remained unrevised over the past month at $2.02. It also indicates no change compared to the year-over-year reported figure.EXR’s 2024 ProjectionsFor 2024, Extra Space Storage expected core FFO per share in the range of $8.00-$8.15. The full-year guidance is based on the assumption of a decline of 0.25-0.50% year over year in same-store revenues and a 4.25-5.25% increase in same-store expenses. Consequently, same-store NOI growth is projected in the band of negative 2.25% to negative 0.50%.For the full year, the Zacks Consensus Estimate for core FFO per share is currently pegged at $8.10. This indicates no change from the year-ago reported figure. The Zacks Consensus Estimate for 2024 revenues is pegged at $3.28 billion, implying an increase of 28% from the year-ago reported number.What Our Quantitative Model Predicts for EXROur proven model does not conclusively predict a likely surprise in terms of core 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 not the case here.Extra Space Storage currently has an Earnings ESP of 0.00% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks That Warrant a LookHere are two stocks from the broader REIT sector — Gaming and Leisure Properties GLPI and Ryman Hospitality Properties RHP — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.Gaming and Leisure Properties, scheduled to report quarterly numbers on Feb. 20, has an Earnings ESP of +0.83% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.Ryman Hospitality, scheduled to report quarterly numbers on Feb. 20, has an Earnings ESP of +4.91% 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.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Extra Space Storage Inc (EXR): Free Stock Analysis Report Ryman Hospitality Properties, Inc. (RHP): Free Stock Analysis Report Gaming and Leisure Properties, Inc. (GLPI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks