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Big Yellow upgraded to ‘overweight’ by JP Morgan over self-storage sector prospects


Big Yellow Group PLC (LON:BYG) was upgraded to ‘overweight’ from ‘underweight’ by JP Morgan as analysts no longer believe the self-storage sector may suffer from the economic slowdown because of its consumer-facing nature.

The price target for the FTSE 250 group was raised to 1,250p from 840p due to reversal of yield expansion which the investment bank previously factored on recessionary impacts, which now look much more modest.

READ: Big Yellow sees shift in demand to business customers but uncertainty remains

Analysts have changed their view on the company as recessionary exposed to structurally supported, while extended lockdown across Europe are disproportionately impacting other sectors.

JP Morgan looked at the third-quarter results of Euronext-listed peer Shurgard, which showed very strong operating performance.

“We also see the shares continuing to trade strongly as self-storage has traded solidly through COVID-19 lockdowns,” they commented.

“Development pipelines will support recovery post 2021 and finally balance sheets remain amongst the best in the sector.”

Shares advanced 4% to 1,145.6p on Wednesday at noon, only 4% below January levels and 64% above the March trough.

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