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Prologis (PLD) Up 2.5% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Prologis, Inc. (PLD - Free Report) . Shares have added about 2.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is PLD 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 catalysts.
Prologis reported second-quarter 2018 core FFO per share of 71 cents, in line with the Zacks Consensus Estimate. However, results compared unfavorably with the year-ago figure of 84 cents. The company witnessed a weak top line in the quarter. However, period-end occupancy remained high.
Moreover, this industrial REIT increased and narrowed its guidance for 2018 core FFO per share and same store NOI.
The company generated rental revenues of $544.7 million, which missed the Zacks Consensus Estimate of $560.6 million. It also compared unfavorably with the year-ago tally of $ 576.4 million.
Quarter in Detail
At the end of the reported quarter, occupancy level in the company’s owned and managed portfolio was 97.4%, expanding 120 basis points (bps) year over year.
During the quarter under review, Prologis signed 39 million square feet of leases in its owned and managed portfolio compared with the 33 million square feet of area recorded in the year-ago period.
Prologis’ share of net effective rent change was 20.6% in the April-June quarter compared with 20.7% recorded a year ago. The figure was led by the U.S. portfolio, which recorded impressive growth of 30.7%. Cash rent change was 9.7%, as against 9.1% recorded in the year-earlier quarter.
Cash same-store NOI registered 7.0% growth compared with the 6.4% increase reported in the comparable period last year. This was led by 8.2% growth reported in the U.S. portfolio.
In second-quarter 2018, Prologis’ share of building acquisitions amounted to $101 million, with a weighted average stabilized cap rate of 4.9%. Development stabilization aggregated $592 million, while development starts totaled $744 million, with 25.4% being build-to-suit. Furthermore, the company’s total dispositions and contributions came in at $416 million, with weighted average stabilized cap rate (excluding land and other real estate) of 5.1%.
Liquidity
Finally, the company exited the second quarter with cash and cash equivalents of $527.8 million, up from $458.1 million recorded at the end of the prior quarter. It had $4.0 billion of liquidity.
Outlook
Buoyed by improved outlook for market rental growth as well as year-to-date performance, Prologis has increased and narrowed its guidance for 2018 core FFO per share and same store NOI. The company now projects core FFO per share at $2.98-$3.02 compared with the prior guidance of $2.95-$3.01. This denotes an increase of 2 cents per share at the mid-point.
Moreover, cash same-store NOI (Prologis share) is projected at 6.25-6.75% compared with 5.5-6.5% estimated earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been four revisions lower for the current quarter.
At this time, PLD has a poor Growth Score of F, however its Momentum is doing a lot better with a B. 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.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, PLD 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 2.5% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Prologis, Inc. (PLD - Free Report) . Shares have added about 2.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is PLD 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 catalysts.
Prologis Meets Q2 FFO Estimates, Raises 2018 Guidance
Prologis reported second-quarter 2018 core FFO per share of 71 cents, in line with the Zacks Consensus Estimate. However, results compared unfavorably with the year-ago figure of 84 cents. The company witnessed a weak top line in the quarter. However, period-end occupancy remained high.
Moreover, this industrial REIT increased and narrowed its guidance for 2018 core FFO per share and same store NOI.
The company generated rental revenues of $544.7 million, which missed the Zacks Consensus Estimate of $560.6 million. It also compared unfavorably with the year-ago tally of $ 576.4 million.
Quarter in Detail
At the end of the reported quarter, occupancy level in the company’s owned and managed portfolio was 97.4%, expanding 120 basis points (bps) year over year.
During the quarter under review, Prologis signed 39 million square feet of leases in its owned and managed portfolio compared with the 33 million square feet of area recorded in the year-ago period.
Prologis’ share of net effective rent change was 20.6% in the April-June quarter compared with 20.7% recorded a year ago. The figure was led by the U.S. portfolio, which recorded impressive growth of 30.7%. Cash rent change was 9.7%, as against 9.1% recorded in the year-earlier quarter.
Cash same-store NOI registered 7.0% growth compared with the 6.4% increase reported in the comparable period last year. This was led by 8.2% growth reported in the U.S. portfolio.
In second-quarter 2018, Prologis’ share of building acquisitions amounted to $101 million, with a weighted average stabilized cap rate of 4.9%. Development stabilization aggregated $592 million, while development starts totaled $744 million, with 25.4% being build-to-suit. Furthermore, the company’s total dispositions and contributions came in at $416 million, with weighted average stabilized cap rate (excluding land and other real estate) of 5.1%.
Liquidity
Finally, the company exited the second quarter with cash and cash equivalents of $527.8 million, up from $458.1 million recorded at the end of the prior quarter. It had $4.0 billion of liquidity.
Outlook
Buoyed by improved outlook for market rental growth as well as year-to-date performance, Prologis has increased and narrowed its guidance for 2018 core FFO per share and same store NOI. The company now projects core FFO per share at $2.98-$3.02 compared with the prior guidance of $2.95-$3.01. This denotes an increase of 2 cents per share at the mid-point.
Moreover, cash same-store NOI (Prologis share) is projected at 6.25-6.75% compared with 5.5-6.5% estimated earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been four revisions lower for the current quarter.
Prologis, Inc. Price and Consensus
Prologis, Inc. Price and Consensus | Prologis, Inc. Quote
VGM Scores
At this time, PLD has a poor Growth Score of F, however its Momentum is doing a lot better with a B. 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.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, PLD has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.