Public Storage (NYSE:PSA) Hit Hard with Currency Losses

Citing the unhedged €378.7 million loan to Shurgard Europe, FBR is lowering their FFO per share estimates on Public Storage (NYSE:PSA), with currency exchange losses expected to hit them hard.

FBR says, "We are adjusting our FFO per share estimates for 4Q10 and FY10 to $1.32 and $4.71 from $1.37 and $4.76, respectively, due to estimated foreign currency exchange losses on the company's unhedged €378.7 million loan to Shurgard Europe. Public Storage owns a 49% equity stake in Shurgard Europe, with the remaining 51% equity interest owned by an institutional investor. Public Storage accounts for this investment under the equity method. With the depreciation of the euro against the U.S. dollar during 4Q10, the impact of the foreign exchange translation lowers FFO but has no impact on cash flow. As such, this adjustment does not change our thesis on the stock."

FBR Capital maintains an "Underperform" on Public Storage, which closed Tuesday at $100.99, dropping $2.54, or 2.45 percent. FBR has a price target on them of 104.50.