Public Storage’s New Debt & Financing Risk – A Cause for Worry?

Public Storage (PSA) has disclosed a new risk, in the Debt & Financing category.

Public Storage faces heightened financial pressure as the Federal Reserve’s significant interest rate hikes combat inflation. These increases elevate the cost of issuing new debt or refinancing, potentially leading to steeper debt service expenses or preferred share dividends. Concurrently, the appeal of Public Storage’s common share dividends wanes relative to bond yields. As rising capital costs influence property acquisition and development valuations, the company’s expansion efforts could stall. Moreover, the broader economic strain from higher interest rates threatens tenant stability, risking increased vacancy rates and revenue loss for Public Storage.

The average PSA stock price target is $299.45, implying 3.75% upside potential.

To learn more about Public Storage’s risk factors, click here.