...

Public Storage (PSA) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Public Storage (PSA)

View Full Profile →

Intrinsic Value (DCF)

Current$293.03
→
Intrinsic$314.80
+7%
$199.14$314.80$534.62
Market implies 9% growth for 5 years
PSA appears fairly valued — current price aligns with our DCF estimate.
At $293, the market prices in 9% annual cash flow growth — a moderate expectation aligned with historical trends (10%).
Range: Bear $199 → Bull $535. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →6%8%10%12%
8%$385$424$466$511
10%$259$286$315$346
12%$189$209$231$254
14%$145$161$178$196

Bull Case

  • Bull case ($535) offers 82% upside at 13% growth, 9% discount
  • 7% margin of safety vs. base case estimate
  • Market-implied growth (9%) ≤ historical CAGR (10%)

Bear Case

  • Bear case ($199) implies 32% downside at 8% growth, 12% discount
Loading charts...

5-Year FFO Projection

Year 1$3.54B
Year 2$3.91B
Year 3$4.32B
Year 4$4.77B
Year 5$5.27B
Terminal$77.48B

📐 Model Inputs

Growth Rate10.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$3.20BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare PSA vs OStock Screener

Frequently Asked Questions

Is PSA stock undervalued or overvalued?
🟢 UNDERVALUED

PSA trades at $293.03 vs. our DCF-derived intrinsic value of $314.80, implying +16% upside. At a 10.0% WACC and 10.5% projected FCF growth, the market appears to be underpricing the present value of PSA's future cash flows. The bear case ($208.42) still suggests upside, providing margin of safety.

What is PSA's intrinsic value?

Using a 5-year DCF model: Base FCF of $3.20B, projected at 10.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $8.91B net debt and dividing by 0.18B shares: Bear $208.42 | Base $314.80 | Bull $460.26. Current price $293.03 implies +16% to base case.

How is PSA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 10.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($64.32B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.1x.