Raymond James analyst Jonathan Hughes has started coverage on SmartStop Self Storage (SMA, Financial), giving it an Outperform rating and setting a price target of $40. He highlights that SmartStop's portfolio and operational capabilities match those of more established competitors, yet it also offers better organic growth and margin potential. The company's smaller size provides a greater opportunity for external growth.
Further supporting the positive outlook, Hughes notes that the self-storage real estate investment trust (REIT) sector is currently trading below its typical valuation compared to the broader REIT market. This suggests that any potential downside for SmartStop is likely limited. Investors are advised to consider these factors as they make decisions about including (SMA, Financial) in their portfolios.