How Public Storage’s Recent 8.5% Rally Impacts Its Valuation in 2025

If you’ve been eyeing Public Storage’s stock lately, you’re definitely not alone. Every investor wants to know whether now is the moment to buy, hold, or move on. After another month where shares climbed an impressive 8.5% and recently closed at $306.28, it is natural to wonder if there is more upside, or if recent gains reflect a new sense of risk in the market.

The last year has been a bit of a rollercoaster for Public Storage. The stock is down 5.8% over 12 months, but longer-term holders have seen gains of more than 64% over five years. These swings have a lot to do with shifting demand for self-storage, new facility announcements, and market speculation about how the company will fare as consumers keep moving and businesses adapt.

In recent news, Public Storage’s expansion into several high-demand metro areas was met with optimism by analysts who cited long-term growth potential, especially as more people relocate and urban populations increase. At the same time, broader industry trends and economic uncertainty are still keeping some investors on their toes.

So, how does Public Storage shape up if you are focused on valuation? By the numbers, their valuation score stands at 4 out of 6. That means the company is currently undervalued in four important areas. In the sections that follow, I will break down how Public Storage fares across several standard valuation models and share what I believe is the most insightful way to judge whether the stock is truly worth buying now.

Public Storage delivered -5.8% returns over the last year. See how this stacks up to the rest of the Specialized REITs industry.

Approach 1: Public Storage Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used valuation method that estimates the present value of a business by projecting its future cash flows and then discounting them back to today's terms. In this case, the model uses adjusted funds from operations as the basis for calculation, which is especially relevant for real estate investment trusts like Public Storage.

Currently, Public Storage reports last twelve months free cash flow of $3.03 billion. Analyst estimates extend up to five years, with future free cash flow projected to reach $3.47 billion by the end of 2029. Beyond that, projections are extrapolated using historical growth rates and market trends.

Based on these forecasts, the DCF model suggests an intrinsic fair value of $459.48 per share. Compared to Public Storage’s current share price of $306.28, this indicates the stock trades at an approximate 33.3% discount to its estimated fair value.

In summary, the DCF approach points to Public Storage currently being significantly undervalued by the market.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Public Storage.

Our Discounted Cash Flow (DCF) analysis suggests Public Storage is undervalued by 33.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Public Storage Price vs Earnings

The Price-to-Earnings (PE) ratio is a popular way to value profitable, established companies like Public Storage because it directly relates the market price of the stock to its underlying earnings. For investors, a lower-than-average PE may suggest a stock is undervalued, while a higher PE usually reflects optimism about future growth or lower perceived risk.

What counts as a “normal” PE ratio varies depending on the company’s growth prospects, profitability, and how stable or risky its business appears to investors. Faster-growing or less risky companies typically justify higher PEs, while stagnant or riskier firms command lower ones.

Public Storage is currently trading at a PE ratio of 33.3x. This is below the peer group average of 38.6x, but it is well above the Specialized REITs industry average of 17.8x. Based just on headline numbers, Public Storage looks cheaper than close peers but more expensive than the broader industry.

Simply Wall St’s “Fair Ratio” goes a step further by considering not just industry averages or similar companies, but also unique factors like Public Storage’s growth outlook, profit margins, market cap, and risk profile. The Fair Ratio for Public Storage is 35.9x, which is slightly higher than its current PE. Because this difference is small, the stock appears to be priced around fair value using this lens.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Public Storage Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply the story you believe about a company, why it will succeed or struggle, summed up as your expectations for its future revenue, earnings, margins, and ultimately, your fair value estimate.

This approach connects the dots between what you know (or believe) about Public Storage’s business, your financial forecasts, and the fair value you assign to the stock. Narratives make it easy for any investor to look beyond static numbers. Within the Simply Wall St Community page, you can explore, create, and share these perspectives, and millions already do.

By using Narratives, you can decide when to buy or sell by instantly comparing your fair value (driven by your personal story and forecasts) to the live share price. Those values update automatically as new data arrives, whether it is earnings releases or breaking news.

For example, one Narrative for Public Storage highlights strong digital adoption and urban trends driving long-term growth, resulting in a fair value of $350 per share. Another focuses on oversupply risk and rising costs, giving a more cautious fair value of $287. You can see how different perspectives lead to distinctly different strategies.

Do you think there's more to the story for Public Storage? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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