Big Yellow Group Plc: A solid quarter of activity, management flagging uncertainty, but one to watch in 2H: 1Q27 First Take

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Big Yellow Group Plc: A solid quarter of activity, management flagging uncertainty, but one to watch in 2H: 1Q27 First Take

Neil Green, CFA AC Europe Equity Research

(44-20) 7134-4478 20 July 2026 C A Z E N O V E

neil.d.green@jpmorgan.com

Investment Thesis, Valuation and Risks

Big Yellow Group Plc (Overweight; Price Target: 1,190p)

Investment Thesis

Big Yellow is a high-quality portfolio dominated by mature stores, although development

focus in recent years adds another lever of growth. The portfolio has a London/SE England

focus and management is excellent, in our view. We are Overweight due to the quality of

the portfolio, development opportunities on the balance sheet and the strong debt profile of

the company. Short lease lengths and pricing power should help offset inflation via rental

growth, although we note near-term cost pressures and an uncertain macro environment that

is currently weighing on the near-term outlook.

Valuation

Our Dec-27 price target for Big Yellow is based on our total returns-based European

Valuation Model, which takes into account whether a company creates or destroys value.

We argue that companies that have a positive spread between returns and their weighted-

average cost of capital (WACC) should trade at a premium to NNAV, whereas those with

a negative spread should be priced below NNAV. We apply this spread to the invested

capital, discount back, and add/subtract to our NNAV forecast to derive our price target.

Risks to Rating and Price Target

The main downside risk to our target price is a material change in the economic exposure

of the sector, resulting in downside risk to earnings, or the equity market focusing on value

over growth. We see self-storage as a structurally supported sector, with resilient cash-flow