BMO Capital maintained its Market Perform rating and $122.00 price target for ProLogis (NYSE: NYSE:), a logistics real estate firm. The company reported a higher-than-expected Core Funds From Operations (FFO) per share for the third quarter of 2024, which exceeded analyst predictions by $0.06. The analyst attributed this performance largely to favorable currency exchange rates, particularly the strength of the Euro during the period.
Despite the beat in the third quarter, ProLogis has only slightly adjusted its full-year 2024 Core FFO guidance, with a modest increase of $0.01 per share. BMO Capital expressed interest in further details regarding the treatment of currency fluctuations in the company’s yearly guidance, which could have implications for future performance evaluations.
ProLogis experienced a slight dip in occupancy rates during the third quarter of 2024. However, the company’s full-year 2024 guidance remains largely unchanged for several key metrics, including average occupancy and Same-Store Net Operating Income (SS NOI). The only notable adjustments in the guidance are reductions in General & Administrative (G&A) expenses and the number of new development starts.
The unchanged guidance, despite the occupancy slip and the minor adjustments to G&A and development starts, suggests a stable outlook for the company’s operational performance. BMO Capital’s reiteration of the Market Perform rating indicates a neutral stance on the stock, maintaining the previously set price target of $122.00.
ProLogis, a logistics real estate company, has seen adjustments in its financial outlook and stock ratings. BTIG maintains a Buy rating on ProLogis, despite lowering the 2025 core FFO per share forecast due to anticipated lower promote revenue. The firm anticipates a recovery in demand by 2025. Similarly, Morgan Stanley retains a positive outlook, projecting a 7.3% growth in same-store net operating income (NOI) and a 7.5% year-over-year growth in funds from operations (FFO) for 2025.
However, Evercore ISI trimmed its price target for ProLogis to $122, reflecting a conservative outlook on rent growth and NOI projections. RBC Capital downgraded ProLogis stock to a Sector Perform rating from an Outperform, citing limited medium-term upside.
Citi raised its price target for ProLogis to $150, maintaining a Buy rating, based on the company’s improved fundamentals. Argus also increased its price target for ProLogis from $120 to $135 while maintaining a Buy rating.
ProLogis issued $1.1 billion in new debt securities for general corporate purposes, including repaying borrowings under global lines of credit. The company also declared a dividend of $0.96 per share on its common stock and a dividend of $1.0675 per share on the 8.54% Series Q Cumulative Redeemable Preferred Stock.
InvestingPro Insights
To complement BMO Capital’s analysis of ProLogis (NYSE: PLD), recent data from InvestingPro offers additional context for investors. As of the last twelve months ending Q2 2024, ProLogis reported a P/E ratio of 53.0, indicating that the stock is trading at a premium compared to its earnings. This aligns with an InvestingPro Tip highlighting that PLD is “Trading at a high earnings multiple.”
Despite the high valuation, ProLogis has demonstrated commitment to shareholder returns. An InvestingPro Tip notes that the company “Has raised its dividend for 10 consecutive years,” which may appeal to income-focused investors. The current dividend yield stands at 3.16%, with a notable dividend growth of 10.34% over the last twelve months.
In terms of financial performance, ProLogis achieved a revenue of $8.1 billion in the last twelve months, with a slight growth of 1.01%. The company maintains a strong gross profit margin of 74.88%, reflecting efficient management of its real estate portfolio.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into ProLogis’s financial health and market position. There are 8 more InvestingPro Tips available for PLD, which could be valuable for making informed investment decisions.
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