In a note on Friday, the German bank maintained its price target on the storage firm at 750p, saying the shares had recovered towards the target during “better than expected lockdown trading in May and June” but further “positive earnings surprises are unlikely over the next 12 months”.
“We continue to see Safestore as an exceptional long-term equity story, although expect a pause in growth through the inevitably weaker economic outlook for the remainder of the year”, the broker said.
“We expect a slowdown in [like-for-like sales] over the remainder of the year, particularly as government support schemes roll-off, affecting Safestore customers. While earnings growth may be supported by further European M&A, we consider this largely in the price at these levels, and would await a more attractive entry point before returning as buyers”, Berenberg added.
The broker’s reassessment followed Safestore’s first half results last week, where it reported £79.3mln of revenue in the six months to April 30, 2020, up 8.5% on a year earlier.
The company also recommended a 7.3% increase in the interim dividend to 5.9p per share.
Shares in Safestore were up 0.2% at 720p in mid-morning trading.
Published at Fri, 26 Jun 2020 09:50:00 +0000-Safestore down to ‘hold’ as Berenberg warns outperformance likely to slow