Markets & Finance

Goldman Cuts Public Storage from 'Recommended List'

Goldman Sachs cut Public Storage (PSA) from its recommended list, and now rates the stock as market perform.

On Thursday the company posted $0.70 vs. $0.75 second quarter funds from operations per share despite a 7.6% revenue rise.

Analyst James Kammert says second quarter funds from operations salesforce missed the $0.77 consensus estimate by a wide margin. He says occupancy remains well below a year ago's level after two years of aggressive rent increases. Kammert expects a gradual recovery in occupancy through 2003. However, he cut his $3.18 2002 funss from operations share estimate to $2.81 and cut the $3.54 2003 to $3.07. He notes the company's dividend is sound, and that its cash of $172 million exceeds the $122 million in debt. He says he is downgrading given the anticipated price drop in the near term, and given the company's conservative earnings assumptions.

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