We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Prologis (PLD) Tops Q1 FFO and Revenue Estimates, Trims View
Read MoreHide Full Article
Prologis, Inc. (PLD - Free Report) reported first-quarter 2020 core funds from operations (FFO) per share of 83 cents, beating the Zacks Consensus Estimate of 81 cents. Results also compare favorably with the year-ago figure of 73 cents.
The better-than-expected performance was driven by decent growth in rental income. Occupancy level has been healthy. However, the company has revised its full-year outlook in light of the coronavirus pandemic. The company assumed reduced demand into the third quarter and expects operating environment to start recovering toward the end of the year. Also, the company noted that new deployment will be assessed on a per-transaction basis.
Prologis generated rental revenues of $878.8 million, which registered 26.1% growth from the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $850.2 million.
Quarter in Detail
At the end of the reported quarter, occupancy level in the company’s owned-and-managed portfolio was 95.5%. During the first quarter, 35 million square feet of leases commenced in the company’s owned-and-managed portfolio, while retention level was 75.5%.
Prologis’ share of net effective rent change was 25.1% during the January-March quarter, driven by the United States at 31%. Cash rent change was 13.4%, while cash same-store net operating income (NOI) registered 4.6% growth.
In first-quarter 2020, Prologis’ share of building acquisitions amounted to $312 million, with a weighted average stabilized cap rate of 4.2%. Development stabilization aggregated $687 million, while development starts totaled $301 million, with 17.3% being build-to-suit.
Furthermore, the company’s total dispositions and contributions came in at $708 million, with weighted average stabilized cap rate (excluding land and other real estate) of 4.8%. Portfolio acquisitions, inclusive of the acquisitions of Industrial Property Trust Inc. on Jan 8, 2020, and Liberty Property Trust on Feb 4, 2020, amounted to $14.6 billion.
Liquidity
The company exited the March-end quarter with cash and cash equivalents of $807.9 million, down from the $1.09 billion recorded at the end of 2019. Coupled with $3.8 billion in total line availability, Prologis ended the quarter with $4.6 billion in liquidity.
Per management, consolidated maturities until 2022 have been effectively addressed, while earnings have been insulated from FX movements through the next three years. Further, it was pointed out that more than 95% of Prologis equity is in USD. Moreover, at quarter end, the company's weighted average rate on its total debt was 2.3%, with a weighted average remaining term of 9.1 years.
Outlook
Prologis’ revised guidance assumes no further activity other than the transactions currently under contract.
The company projects core FFO per share at $3.55-$3.65 compared with the prior guidance of $3.67-$3.75. The Zacks Consensus Estimate for the same is currently pegged at $3.62.
The company forecasts year-end occupancy of 94.5-96.0% compared with the 96-97% guided earlier. Cash same-store NOI (Prologis share) is projected in the range of 1.75-3.25% compared with the 4.25-5.25% expected earlier.
Moreover, the company projects $450 million of building acquisitions compared with $500-$700 million, while development starts are expected to be $500-$800 million as against the prior estimate of $2.0-$2.4 billion.
We now look forward to the earnings releases of other REITs like SL Green Realty Corp. (SLG - Free Report) , Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Highwoods Properties, Inc. (HIW - Free Report) . While SL Green is slated to report first-quarter earnings on Apr 22, Alexandria Real Estate Equities and Highwoods Properties have earnings release scheduled for Apr 27 and 28, respectively.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Prologis (PLD) Tops Q1 FFO and Revenue Estimates, Trims View
Prologis, Inc. (PLD - Free Report) reported first-quarter 2020 core funds from operations (FFO) per share of 83 cents, beating the Zacks Consensus Estimate of 81 cents. Results also compare favorably with the year-ago figure of 73 cents.
The better-than-expected performance was driven by decent growth in rental income. Occupancy level has been healthy. However, the company has revised its full-year outlook in light of the coronavirus pandemic. The company assumed reduced demand into the third quarter and expects operating environment to start recovering toward the end of the year. Also, the company noted that new deployment will be assessed on a per-transaction basis.
Prologis generated rental revenues of $878.8 million, which registered 26.1% growth from the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $850.2 million.
Quarter in Detail
At the end of the reported quarter, occupancy level in the company’s owned-and-managed portfolio was 95.5%. During the first quarter, 35 million square feet of leases commenced in the company’s owned-and-managed portfolio, while retention level was 75.5%.
Prologis’ share of net effective rent change was 25.1% during the January-March quarter, driven by the United States at 31%. Cash rent change was 13.4%, while cash same-store net operating income (NOI) registered 4.6% growth.
In first-quarter 2020, Prologis’ share of building acquisitions amounted to $312 million, with a weighted average stabilized cap rate of 4.2%. Development stabilization aggregated $687 million, while development starts totaled $301 million, with 17.3% being build-to-suit.
Furthermore, the company’s total dispositions and contributions came in at $708 million, with weighted average stabilized cap rate (excluding land and other real estate) of 4.8%. Portfolio acquisitions, inclusive of the acquisitions of Industrial Property Trust Inc. on Jan 8, 2020, and Liberty Property Trust on Feb 4, 2020, amounted to $14.6 billion.
Liquidity
The company exited the March-end quarter with cash and cash equivalents of $807.9 million, down from the $1.09 billion recorded at the end of 2019. Coupled with $3.8 billion in total line availability, Prologis ended the quarter with $4.6 billion in liquidity.
Per management, consolidated maturities until 2022 have been effectively addressed, while earnings have been insulated from FX movements through the next three years. Further, it was pointed out that more than 95% of Prologis equity is in USD. Moreover, at quarter end, the company's weighted average rate on its total debt was 2.3%, with a weighted average remaining term of 9.1 years.
Outlook
Prologis’ revised guidance assumes no further activity other than the transactions currently under contract.
The company projects core FFO per share at $3.55-$3.65 compared with the prior guidance of $3.67-$3.75. The Zacks Consensus Estimate for the same is currently pegged at $3.62.
The company forecasts year-end occupancy of 94.5-96.0% compared with the 96-97% guided earlier. Cash same-store NOI (Prologis share) is projected in the range of 1.75-3.25% compared with the 4.25-5.25% expected earlier.
Moreover, the company projects $450 million of building acquisitions compared with $500-$700 million, while development starts are expected to be $500-$800 million as against the prior estimate of $2.0-$2.4 billion.
Prologis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prologis, Inc. Price, Consensus and EPS Surprise
Prologis, Inc. price-consensus-eps-surprise-chart | Prologis, Inc. Quote
We now look forward to the earnings releases of other REITs like SL Green Realty Corp. (SLG - Free Report) , Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Highwoods Properties, Inc. (HIW - Free Report) . While SL Green is slated to report first-quarter earnings on Apr 22, Alexandria Real Estate Equities and Highwoods Properties have earnings release scheduled for Apr 27 and 28, respectively.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>