Short Trade Idea
Enter your short position between $141.39 (an intermediate horizontal support level) and $145.64 (yesterday’s intra-day high).
Top Regulated Brokers
Market Index Analysis
- Extra Space Storage (NYSE:EXR) is a member of the S&P 500 Index.
- This index retreated from its all-time highs, but the AI bubble remains intact, while underlying economic fundamentals suggest rising issues.
- The Bull Bear Power Indicator for the S&P 500 Index is bullish with a negative divergence.
Market Sentiment Analysis
Equity futures are lower this morning following yesterday’s sell-off, as uncertainty over the Iran war has increased after the House of Representatives voted to end the war, countering President Trump’s agenda. Pouring cold water on the AI mania was earnings from Broadcom (NASDAQ:AVGO), which disappointed on future AI chip sales, while SpaceX confirmed a record-breaking $75 billion IPO target.
Extra Space Storage Fundamental Analysis
Extra Space Storage is a real estate investment trust (REIT), the largest US owner of self-storage units, and the largest self-storage property manager. It has over 4,000 locations in 43 states, and Washington, DC, with more than 2.6 million units and over 283.4 million square feet of net rentable space.
So, why am I bearish on EXR at current levels?
Extra Space Storage experienced a 6.0% year-on-year rise in operating expenses in its latest quarter, while revenues rose only 1.7%. Its occupancy rates have decreased to 93.0%, driven by oversupply in Sun Belt states, and average self-storage rates have declined by 2.2%, adding to revenue pressures amid shrinking operating margins. Valuations remain high, and EXR also faces regulatory scrutiny over predatory pricing at 60 locations in New York.
Metric | Value | Verdict |
P/E Ratio | 32.14 | Bearish |
P/B Ratio | 2.25 | Bearish |
PEG Ratio | 6.14 | Bearish |
Current Ratio | 0.69 | Bearish |
ROIC-WACC Ratio | Negative | Bearish |
The price-to-earnings (P/E) ratio of 32.14 makes EXR an expensive stock. By comparison, the P/E ratio for the S&P 500 Index is 32.57.
The average analyst price target for EXR is $153.60. This suggests limited upside potential with increasing downside risks.
Extra Space Storage Technical Analysis
Today’s EXR Signal
- The EXR D1 chart shows price action approaching a significant horizontal resistance zone.
- It also shows price action below its ascending Fibonacci Retracement Fan.
- The Bull Bear Power Indicator turned bullish but remains below its descending trendline.
- The average bearish trading volumes are higher than the average bullish trading volumes over the past week.
- EXR moved higher with the S&P 500, a bullish confirmation, but bearish catalysts are rising.
My EXR Short Stock Trade
- EXR Entry Level: Between $141.39 and $145.64
- EXR Take Profit: Between $121.03 and $125.71
- EXR Stop Loss: Between $151.06 and $155.19
- Risk/Reward Ratio: 2.11
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