Safestore Shares Dip on Mixed Note: Barclays Downgrades Rating, Raises Target

Safestore Holdings share price (LON:SAFE) slipped 1.74% to 788.50p today following a broker downgrade that paradoxically came alongside a significantly raised price target, highlighting the self-storage operator's valuation conundrum after a period of strong outperformance.

Barclays downgraded the stock from Overweight to Equal Weight whilst simultaneously lifting its price target from 740p to 870p. The investment bank cited valuation concerns as the primary driver behind the rating cut, noting that the shares had reached their previous target following robust gains. The new price target implies potential upside of approximately 10% from current levels, yet the neutral stance suggests Barclays sees limited near-term catalysts to drive further meaningful appreciation.

The downgrade reflects a broader reassessment of opportunities within the self-storage sector. Barclays analysts indicated a preference for rival Big Yellow Group, pointing to comparable earnings per share yields but superior anticipated earnings growth at the competitor. This relative positioning underscores how Safestore's recent share price strength may have compressed its risk-reward profile compared to sector peers.

Despite the cautious rating adjustment, Safestore's operational momentum remains intact. The company's fourth-quarter trading update for the period ending 31 October 2025 demonstrated solid underlying performance, with total revenue climbing 7.1% to £62.0 million. Growth was broad-based across the portfolio, driven by contributions from both like-for-like stores and new openings spanning all geographic markets.

The UK segment delivered like-for-like revenue growth of 3.4%, whilst the Paris operations posted a 2.0% increase. Expansion markets including Spain, the Netherlands, and Belgium collectively grew by 4.9%, reflecting the company's successful geographic diversification strategy. Safestore added four new stores during the period, contributing an additional 98,900 square feet to its footprint and positioning the business for continued capacity-led growth.

Price Targets

The mixed note from Barclays, a higher price target but a lower rating, encapsulate the current investor dilemma for Safestore. While the company's operational performance and expansion are strong, its premium valuation relative to peers like Big Yellow Group suggests that much of the good news may already be priced in, posing a potential headwind for future share price gains.