Prologis Posts Q2 Beat and Raises Guidance; Shares Rise

Prologis, Inc. (PLD) reported stronger-than-expected Q3 results driven by robust growth in market rents and valuations, strong demand for logistics space, and all-time low vacancies.

Don't Miss Our Christmas Offers:

Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Shares of the global industrial real estate investment trust (REIT) gained 1% on October 15 to close at $136.98.

Markedly, Q3 adjusted earnings of $0.97 per share more than doubled year-over-year and significantly beat analysts’ expectations of $0.52 per share. The company reported earnings of $0.40 per share in the prior-year period.

The company reported revenues of $1.18 billion, beating analysts’ expectations of $1.03 billion. Rental revenues came in at $1.04 billion, up from $984 million in the prior-year quarter.

The company reported Q3 Funds from Operations (FFO) of 1.04 per share versus FFO of $0.90 per share in the prior-year period. (See PLD stock charts on TipRanks)

Based on robust Q3 results, the company raised its guidance for Fiscal 2021 and now forecasts net earnings in the range of $3.64 – $3.68 per share, compared to the previously guided range of $3.08 – $3.14 per share.

The REIT also forecasts core FFO in the range of $4.11 – $4.13 per share versus previous guidance of $4.04 – $4.08 per share.

Porlogis CFO Thomas S. Olinger commented, “Most of the benefit from the current environment will accrue to the future given our 22 percent in-place-to-market rent spread, the valuation impact on our promotes, our leverage capacity, the $21 billion of development build-out and, most importantly, the vast opportunity set that our global footprint provides.”

Following the strong Q3 results, BMO Capital analyst John Kim reiterated a Buy rating on the stock with the price target of $140 (2.2% upside potential)

Kim forecasts the company to report earnings of $0.81 per share for the fourth quarter of 2021.

Consensus among analysts is a Strong Buy based on 11 Buys and 2 Holds. The average PLD price target of $145.31 implies 6.1% upside potential from current levels.

PLD scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.