In the self-storage sector, future demand catalysts appear constrained with housing turnover rates expected to be limited heading into 2026. Goldman Sachs equity analyst Caitlin Burrows articulated this perspective in a recent analyst note, suggesting that the coming years, 2025 and 2026, will exhibit similar market dynamics with earnings largely swayed by portfolio composition and localized market performance rather than broad demand surges.
Burrows reaffirmed her Buy rating on Public Storage (NYSE: PSA), a leading operator in the self-storage industry, but adjusted the stock's price target downward from $332 to $321. This modification reflects tempered expectations surrounding potential revenue growth amidst the anticipated market environment.
Focusing on revenue metrics, the analyst anticipated that same-store revenue growth for 2026 could fluctuate within a moderate band between -1.0% and +1.2%. These projections notably exclude any outsized growth from the Los Angeles market, which holds particular significance for Public Storage due to its geographic concentration there. The potential removal of wildfire-related pricing restrictions in this region could significantly alter revenue outcomes, but as it stands, these restrictions remain a limiting factor.
When compared to industry peers, Public Storage currently exhibits stronger operational performance against Extra Space Storage Inc (NYSE: EXR) in overlapping markets. Burrows pointed out that performance disparities across similar geographic territories illustrate the importance of not only the location but also the companies’ strategic approach and execution in driving results.
Both Public Storage and Extra Space Storage have demonstrated resilience relative to the broader market trends within the storage sector. Burrows highlighted that while Public Storage has explicitly acknowledged the challenges presented by wildfire restrictions impacting its pricing strategy in the critical Los Angeles area, Extra Space Storage encountered even more significant operational challenges in LA during the third quarter of 2025.
Such localized factors are essential considerations, given that the self-storage industry’s earnings are influenced heavily by regional market conditions and regulatory constraints. The wildfire-related pricing controls have acted as a headwind, primarily affecting Public Storage’s ability to fully capitalize on the demand in the Los Angeles market.
As of the most recent trading data available, shares of Public Storage were up by 0.80%, trading at $290.07. This positive price movement reflects investor sentiment that, despite identified market headwinds, the company holds promising fundamentals supported by its geographic strategy and execution capabilities.
Collectively, the analysis underscores the nuanced landscape in which Public Storage operates. Limited broad demand catalysts and regulatory constraints mean portfolio footprint and market-specific conditions will play outsized roles in financial performance over the near term. Investors and market observers should monitor developments around wildfire pricing regulations in Los Angeles and the companies’ execution in their overlapping markets for indications of potential shifts in earnings trajectories.
In terms of broader sector implications, these dynamics reflect the challenges faced by self-storage operators contending with external market limitations and the importance of strategic positioning to mitigate headwinds.