Surprising that SVI is in the red despite everyone raising their targets not to mention a positive day in the market. GLTA
10:54 AM EDT, 07/29/2022 (MT Newswires) -- National Bank of Canada said StorageVault Canada Inc.'s (SVI.TO) Q2 adjusted funds from operations exceeded expectations with a 13.6% increase in same-store net operating income and over $480 million of acquisitions completed over 2021-22 driving the growth.
The bank noted that StorageVault reported Q2 adjusted funds from operations of $0.058 per share, up 29% from a year earlier. This compared with the consensus of $0.051 and the bank's estimate of $0.052.
It said demand remains "very strong" and noted that the company's short-duration leases and pricing power provide an inflation hedge while demand tends to be recession-resistant.
The bank noted that StorageVault sees higher demand from all customers. Retail users need to free up home office space while commercial accounts need warehousing space in a tight industrial market, it said.
It also noted that rising rates will weigh on forecasts but as an operating company, StorageVault has more levers to pull for offsets than a REIT with contracted cash flows/limited operating leverage. Strong industry performance has left acquisition pricing unchanged, but higher borrowing costs should deter financial players in favour of those with strong operating platforms like StorageVault, the bank said.
The bank said it increased its FFO estimates by about 5% to reflect the upside this quarter and a better-than-expected outlook. It retained its Outperform rating on the stock but raised its target price to $7.50 from $7.00.
Price: 6.54, Change: -0.09, Percent Change: -1.36