Shares of Prologis Inc. (PLD - Analyst Report), a San Francisco-based industrial real estate investment trust (REIT), touched a 52-week high of $41.19 on Thursday, Apr 11, 2013, as it gained momentum following the disclosure of noteworthy deals and expansion moves in the recent months. The closing price of this retail real estate investment trust (REIT) on Apr 11, 2013 was $41.14, representing a year-to-date return of 10.9%. The average trading volume over the last 3 months was nearly 3.1 million shares.
Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left given its strong fundamentals and expansion efforts.
Prologis provides industrial distribution warehouse space in some of the busiest distribution markets across the globe. With growth in e-Commerce, there is an increasing demand for Class-A facilities and Prologis stands to benefit as it has the capacity to offer modern distribution facilities in strategic infill locations. Moreover, leasing decisions that were earlier postponed due to volatility in the markets are gradually coming off the shelf.
Curently, Prologis is significantly capitalizing on promising opportunities across the globe. Its recent build-to-suit deal with end-to-end e-Commerce service provider - SpeedFC, a subsidiary of Navarre Corp. and with Chinese logistics provider, Deppon is expected to contribute meaningfully to the company’s top line.
This week, Prologis penned a new build-to-suit deal with Subaru of America for a distribution center spanning 715,000 square feet in the Northwest Indianapolis submarket at Prologis Park Lebanon. The location in is close proximity with major freeways as well as the Indianapolis International Airport. Notably, with rising occupancies over the last two years, the Indianapolis market offers strong growth potential.
Also, the joint venture with Norges Bank Investment Management is a strategic fit as it will enable the company to substantially penetrate the industrial real estate market of Europe.
On Feb 6, Prologis reported core FFO (funds from operations) per share of 42 cents for fourth-quarter 2012, in line with the Zacks Consensus Estimate. However, total revenue during the reported quarter was $517.6 million, up 13.3% from the prior-year period and well ahead of the Zacks Consensus Estimate of $476 million.
Notably, Prologis has now delivered positive earnings surprises in 2 out of past 4 quarters with an average beat of 2.36%.
Over the last 7 days, the Zacks Consensus Estimate for full-year 2013 remained unchanged at $1.67 per share while the Zacks Consensus Estimate for full-year 2014 stood at $1.79 per share.
Of late, a number of REIT stocks achieved 52-week highs. These include Kimco Realty Corp. (KIM - Analyst Report) and Ventas Inc. (VTR - Analyst Report).
Note: Funds from operations, a widely accepted and reported measure of REITs performance, are derived by adding depreciation, amortization and other non-cash expenses to net income.