Ushering in good news for CubeSmart (CUBE), Moody’s Investor Services, the rating arm of Moody’s Corp. (MCO), has upgraded the company’s senior unsecured bonds and issuer ratings to Baa2 from Baa3 with a stable outlook.
The rating upgrade comes on the back of CubeSmart’s efforts over the past five years to improve its credit profile, as well as its positive operating results helped by healthy fundamentals in the self-storage industry. The company also enjoys a premium portfolio, thanks to its strategic portfolio-repositioning initiatives.
Further, the rating agency expects CubeSmart to adhere to conservative capital structure management even while tapping growth opportunities, posting steady operating results and enjoying sound financial flexibility. All these are reflected in the company’s stable outlook.
In our opinion, the rating upgrade comes as a positive for this self-storage real estate investment trust (REIT), as the move enhances the company’s creditworthiness in the market and is likely to boost investors’ confidence in the stock.
Specifically, with this rating upgrade, CubeSmart can now enjoy reduced costs on its debts and an enhanced access to capital. This, in turn, improves the company’s financial flexibility and offers the wherewithal to drive its growth pursuits. Notably, CubeSmart came up with encouraging results in the second quarter, backed by higher revenues. The company reported an earnings surprise of 8.0%.
CubeSmart currently carries a Zacks Rank #2 (Buy). Investors interested in the REIT sector may consider other stocks like Extra Space Storage Inc. (EXR) and Sovran Self Storage Inc. (SSS). Both stocks carry the same rank as CubeSmart.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment