San Francisco, California-based Prologis, Inc. (PLD) is the global leader in logistics real estate, focusing on high-barrier, high-growth markets. With a market cap of $116.3 billion, Prologis leases modern logistics facilities to a diverse base of customers, principally across business-to-business and retail/online fulfillment categories. The real estate giant is expected to release its Q3 earnings before the market opens on Wednesday, Oct. 16.
Ahead of the event, analysts project Prologis to report core funds from operations (FFO) of $1.38 per share, up 6.2% from $1.30 per share reported in the year-ago quarter. The company has consistently surpassed or matched Wall Street’s core FFO per share estimates in each of the past four quarters. Its core FFO per share for the last reported quarter declined 26.8% year-over-year to $1.34 while exceeding the consensus estimates marginally.
Looking ahead to fiscal 2024, analysts expect Prologis to report a core FFO per share of $5.42, down 3.4% from $5.61 in fiscal 2023. However, in fiscal 2025, its core FFO per share is expected to grow 10.7% year-over-year to $6.00.
PLD has declined 5.3% in 2024, lagging behind the Real Estate Select Sector SPDR Fund’s (XLRE) 11.5% gains and S&P 500 Index’s ($SPX) 20.8% returns on a YTD basis.
Shares of Prologis rose 1.4% after the release of its Q2 earnings on Jul. 17. Despite a decline in both topline and core FFO per share, the company exceeded analyst expectations, buoying investor sentiment. Prologis’ total revenue for the previous quarter dropped 18.1% year-over-year to $2 billion. This can be partially attributed to the effective market rent decline of 2% during the quarter, with 75% of this decline concentrated in specific markets. Although Prologis maintained a robust average occupancy rate of 96.1% in Q2, this figure may dip below 96% in the near term due to challenging lease rollovers and extended lease-up periods.
Despite a year-to-date decline in share prices, Prologis has shown resilience, posting a 12.4% gain over the past three months.
The consensus opinion on the PLD stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 23 analysts covering the stock, 15 recommend “Strong Buy,” one suggests “Moderate Buy,” and seven advise a “Hold” rating.
The mean price target of $136.14 suggests a potential upside of 7.8% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
