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Prologis (PLD) Up 5.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Prologis (PLD - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Prologis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Prologis reported a fourth-quarter 2024 core FFO per share of $1.50, outpacing the Zacks Consensus Estimate of $1.38. This compares favorably with the year-ago quarter’s figure of $1.26.
The quarterly results reflected a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor. In addition, this industrial REIT provided its 2025 outlook.
Prologis generated rental revenues of $1.94 billion, missing the Zacks Consensus Estimate by just 0.09%. However, the figure increased from the $1.76 billion reported in the year-ago period. Total revenues were $2.2 billion, up from the year-ago quarter’s $1.89 billion.
For 2024, the company reported a core FFO per share of $5.56, down 0.9% from the previous year. However, the figure beat the Zacks Consensus Estimate of $5.45. Rental revenues of $7.51 billion increased 10.2% year over year but missed the consensus mark of $7.52 billion.
Per Hamid R. Moghadam, co-founder and CEO of the company, "Post-election leasing activity has been strong, and our ongoing conversations with customers support our expectation that the market is nearing an inflection point. Meanwhile, our platform is uniquely positioned to seize the opportunities created by favorable trends in our data center and energy businesses. The long-term outlook for Prologis is bright."
Quarter in Detail
In the quarter under review, 46.5 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 78.4% in the quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 95.6% in the fourth quarter, down from 95.9% in the prior quarter and 97.1% in the year-ago period.
Prologis’ share of net effective rent change was 66.3% in the October-December quarter. In the reported quarter, the cash rent change was 40.1%. Cash same-store net operating income (NOI) grew 6.7% compared to 7.2% in the previous quarter.
The company’s share of acquisitions amounted to $384 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.9% in the fourth quarter. Development stabilization aggregated $827 million, with 54% being built to suit, while development starts totaled $375 million. Prologis’ total dispositions and contributions were $1.955 billion, with a weighted average stabilized cap rate (excluding land and other real estate) of 4.4%.
However, during the reported quarter, interest expenses jumped 33.1% on a year-over-year basis to $232.2 million.
Liquidity
Prologis exited the fourth quarter of 2024 with cash and cash equivalents of $1.32 billion, up from $780.9 million at the end of the third quarter of 2024. Total liquidity amounted to $7.38 billion at the end of the fourth quarter.
Debt, as a percentage of the total market capitalization, was 25.6% as of Dec. 31, 2024. The company's weighted average interest rate on its share of the total debt was 3.1%, with a weighted average term of 9.2 years.
Prologis and its co-investment ventures issued an aggregate of $1.5 billion of debt in the reported quarter at a weighted average interest rate of 3.5% and a weighted average term of 7.1 years.
2025 Guidance
Prologis provided its 2025 core FFO per share guidance in the range of $5.65-$5.81.
The company expects average occupancy to lie between 94.5% and 95.5%. Cash same-store NOI (Prologis share) is projected in the range of 4-5%.
The company has issued its outlook for capital deployment (Prologis share) on development starts of $2.25-$2.75 billion. Spending on acquisitions is projected to be $750 million-$1.25 billion. Dispositions are estimated at $1.00-$1.50 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Prologis has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Prologis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Prologis (PLD) Up 5.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Prologis (PLD - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Prologis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Prologis' Q4 FFO Beat Estimates, Rental Revenues Rise Y/Y
Prologis reported a fourth-quarter 2024 core FFO per share of $1.50, outpacing the Zacks Consensus Estimate of $1.38. This compares favorably with the year-ago quarter’s figure of $1.26.
The quarterly results reflected a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor. In addition, this industrial REIT provided its 2025 outlook.
Prologis generated rental revenues of $1.94 billion, missing the Zacks Consensus Estimate by just 0.09%. However, the figure increased from the $1.76 billion reported in the year-ago period. Total revenues were $2.2 billion, up from the year-ago quarter’s $1.89 billion.
For 2024, the company reported a core FFO per share of $5.56, down 0.9% from the previous year. However, the figure beat the Zacks Consensus Estimate of $5.45. Rental revenues of $7.51 billion increased 10.2% year over year but missed the consensus mark of $7.52 billion.
Per Hamid R. Moghadam, co-founder and CEO of the company, "Post-election leasing activity has been strong, and our ongoing conversations with customers support our expectation that the market is nearing an inflection point. Meanwhile, our platform is uniquely positioned to seize the opportunities created by favorable trends in our data center and energy businesses. The long-term outlook for Prologis is bright."
Quarter in Detail
In the quarter under review, 46.5 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 78.4% in the quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 95.6% in the fourth quarter, down from 95.9% in the prior quarter and 97.1% in the year-ago period.
Prologis’ share of net effective rent change was 66.3% in the October-December quarter. In the reported quarter, the cash rent change was 40.1%. Cash same-store net operating income (NOI) grew 6.7% compared to 7.2% in the previous quarter.
The company’s share of acquisitions amounted to $384 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.9% in the fourth quarter. Development stabilization aggregated $827 million, with 54% being built to suit, while development starts totaled $375 million. Prologis’ total dispositions and contributions were $1.955 billion, with a weighted average stabilized cap rate (excluding land and other real estate) of 4.4%.
However, during the reported quarter, interest expenses jumped 33.1% on a year-over-year basis to $232.2 million.
Liquidity
Prologis exited the fourth quarter of 2024 with cash and cash equivalents of $1.32 billion, up from $780.9 million at the end of the third quarter of 2024. Total liquidity amounted to $7.38 billion at the end of the fourth quarter.
Debt, as a percentage of the total market capitalization, was 25.6% as of Dec. 31, 2024. The company's weighted average interest rate on its share of the total debt was 3.1%, with a weighted average term of 9.2 years.
Prologis and its co-investment ventures issued an aggregate of $1.5 billion of debt in the reported quarter at a weighted average interest rate of 3.5% and a weighted average term of 7.1 years.
2025 Guidance
Prologis provided its 2025 core FFO per share guidance in the range of $5.65-$5.81.
The company expects average occupancy to lie between 94.5% and 95.5%. Cash same-store NOI (Prologis share) is projected in the range of 4-5%.
The company has issued its outlook for capital deployment (Prologis share) on development starts of $2.25-$2.75 billion. Spending on acquisitions is projected to be $750 million-$1.25 billion. Dispositions are estimated at $1.00-$1.50 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Prologis has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Prologis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.