Public Storage (PSA): A Bull Case Theory

Core Thesis - Public Storage (PSA) has demonstrated strong performance in the self-storage sector, reinforced by a robust fourth-quarter earnings report that exceeded consensus estimates for both revenue and Funds From Operations (FFO) [2][3] Financial Performance - Core FFO was reported at $4.26 per share, surpassing expectations of $4.21, while revenue increased by 3.2% year-over-year, driven by strong pricing power in urban markets like New York and Boston [3] - Management has provided a 2026 FFO guidance of $16.35–$17.00, indicating confidence in sector normalization and positioning the stock at a reasonable multiple for an industry leader [3] Institutional Investor Activity - A large institutional investor sold 1,050 March 20, 2026, $270 put contracts at $2.30 per contract, generating $241,500 in premium on approximately $28 million in notional exposure, reflecting a bullish outlook [4] - The $270 strike price offers a 7.5% buffer and a break-even level of $267.70, aligning with a recently tested technical support zone around $271 that has previously attracted strong institutional buying [4] Market Dynamics - The strategy employed by the institutional investor suggests confidence in limited downside risk as supply growth moderates in the self-storage industry and operating fundamentals stabilize [5] - Public Storage's 4.1% dividend yield and 78% institutional ownership provide structural support for the stock, enhancing its attractiveness even in the absence of significant upside [5] Previous Coverage - Previous bullish analyses on Public Storage highlighted its market dominance, strong profitability metrics, and undervaluation relative to intrinsic value, with the stock price appreciating by approximately 2.01% since the last coverage [6]