On Wednesday, Truist Securities affirmed its Buy rating on shares of ProLogis (NYSE:PLD), with a steady price target of $137.00. The firm's analysis followed the release of the company's third-quarter 2024 financial results, which showed core funds from operations (FFO) per share at $1.43, surpassing the consensus estimate of $1.37 per share. This outperformance was attributed to lower operating expenses, improved fund fees, and reduced taxes.
ProLogis reported that the decrease in operating expenses was partly due to timing and offsets from previous quarters. The company's 2024 FFO per share guidance was also raised slightly, from $5.43 to $5.44 per share, compared to the Truist Securities consensus estimate of $5.42 and the broader consensus of $5.41 per share.
The guidance update included a slight reduction in the forecast for same-store net operating income (SSNOI) growth on a generally accepted accounting principles (GAAP) basis, from 6.0% to 5.75%. However, the cash SSNOI projection remains unchanged at 6.75%. Additionally, development starts are expected to decrease, going from $2.75 billion to $2 billion, but this is balanced by an increase in acquisition investments, rising from $1.25 billion to $2 billion.
Truist Securities noted that despite the current weak investor sentiment, ProLogis's results were perceived as more favorable than what had been anticipated by the market. This sentiment reflects the firm's position on the stock's performance and outlook.
In other recent news, ProLogis, a global leader in logistics real estate, reported a strong third-quarter performance, surpassing analyst estimates. The company's core funds from operations per share (FFOPS) stood at $1.43, exceeding Goldman Sachs' estimate of $1.38 and the FactSet consensus of $1.37. A notable aspect of the report was ProLogis' revised 2024 core FFOPS guidance, indicating an expected year-over-year growth of 8.0%.
ProLogis also reported a 96.2% occupancy rate for the quarter, slightly above the predicted 96.0%, and achieved 50.8 million square feet of leasing activity, marking the highest in eight quarters. In addition, the company raised its acquisition guidance by $750 million.
Various analysts have maintained their ratings for ProLogis. Goldman Sachs reiterated a Buy rating, BTIG maintained a Buy rating with a $154.00 price target, Evercore ISI and Barclays held onto their In-Line and Overweight ratings respectively, while RBC Capital shifted its rating from an "Outperform" to a "Sector Perform". Despite these overall positive ratings, ProLogis is facing modest occupancy challenges and a slight uptick in concessions.
InvestingPro Insights
ProLogis's recent financial performance aligns with several key metrics and insights from InvestingPro. The company's market capitalization stands at an impressive $118.93 billion, underscoring its significant presence in the Industrial REITs industry. This is further supported by an InvestingPro Tip highlighting ProLogis as a prominent player in its sector.
The company's dividend strategy is particularly noteworthy. An InvestingPro Tip reveals that ProLogis has raised its dividend for 10 consecutive years, with a current dividend yield of 3.16%. This consistent dividend growth, coupled with a 10.34% dividend growth rate over the last twelve months, aligns with the company's strong financial performance and may appeal to income-focused investors.
While ProLogis's P/E ratio (adjusted) of 54.36 suggests a high earnings multiple, which is noted in another InvestingPro Tip, the company's ability to surpass earnings estimates and raise guidance indicates a potential for continued growth. This is further supported by the company's profitability over the last twelve months and analysts' predictions of profitability for the current year.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights, with 7 more tips available for ProLogis on the platform.
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