Key Takeaways: We can keep this short - Best Idea Long PSA blew out the quarter vs. both Hedgeye and Consensus (see variance chart below), but all that really matters for the stock is that the company inaugurated FY21 FFO guidance with full ranges for all the key drivers (SSRev, SSExp, SSNOI, Development, Acquisitions, etc). Not only does this bring PSA up to par with the other four peers in the space, but it signals management's ongoing commitment to address long-time shareholder gripes regarding engagement with the street, governance, capital deployment, balance sheet efficiency, etc. All of these items are core to the long thesis for accelerating earnings growth and a positive re-rating of the stock. The next catalyst is the inaugural investor day this coming Monday, 5/3.
- FY21 Core FFO projected in the range of $11.35 to $11.75 vs. Hedgeye at $11.35 and the Street at $11.42 - numbers will be coming up for FY21 and beyond
- Pricing is exceptional with SSRev growth projected up +4% to +5.5% and SSNOI growth up +4.8% to +7.3% - total blow-out, as we were modeling +2.7% and +4.3%, respectively. Street rate growth has been accelerating dramatically, and we would expect to see similar numbers across the space
- On the external growth front, $2.7 billion of acquisitions is also likely above expectations (even including ezStorage) - PSA should be leveraging its cost of capital to accretively add as many acquisitions as possilbe
