Berenberg downgrades Safestore to 'hold'

Berenberg said Safestore, which released its first-half results on 18 June, had shown "remarkably strong" trading despite a two-month impact from the Covid-19 pandemic, with 6% like-for-like and 9% overall revenue growth.

Due to this, and better-than-expected lockdown trading in May and June, the analysts upgraded their forecasts for 2020 by roughly 2%.

However, Berenberg downgraded its recommendation on the group as a result of shares having recovered to their price target and on expectations that further positive earnings surprises were "unlikely" over the next 12 months.

"We continue to see Safestore as an exceptional long-term equity story, although expect a pause in growth through the inevitably weaker economic outlook for the remainder of the year," said Berenberg.

The German bank added that while earnings growth may be supported by further European expansion, it considers this to be largely in the price at current levels, and would await a more "attractive entry point" before returning as buyers.