Safestore’s unscheduled statement guided to trading ahead of market expectations. The momentum built through Q1 has continued into Q2. The UK is performing particularly well. We upgrade our FY21 EPS by 10.5% to 37.5p, in the middle of management’s 37-38p updated guidance range. Trading through Covid has been more resilient than we had anticipated. Rising long-term demand for storage space, above average barriers to entry, latent occupancy and rate upside all underpin long-term growth potential at Safestore. The shares trade on a CY22 P/E of 23.6x and offer an 11% 3-year EPS CAGR. Higher growth assumptions and an unwind of the discount in our RoE/CoE valuation leads to a TP upgrade to 1,060p (from 825p); move from Hold to BUY.
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