Why Industrial REIT Prologis Shares Are Trading Higher Today

Prologis, Inc. PLD shares are trading higher after the company reported second-quarter FY24 results.

Rental revenue of $1.85 billion missed the consensus estimates of $1.875 billion. The company’s average occupancy stood at 96.1%, with a leased 39.6MSF operating portfolio and a 7.0MSF development portfolio.

Core funds from operations per diluted share were $1.34, lower than $1.83 a year ago but above the consensus of $1.33.

During the quarter, Prologis and its co-investment ventures issued an aggregate of $1.2 billion of debt at a weighted average interest rate of 4.4% and a weighted average term of 10.9 years. 

As of June-end, debt as a percentage of total market capitalization was 23.7%, and the company’s weighted average interest rate on its share of total debt was 3.1%, with a weighted average term of 9.3 years and no significant debt maturities until 2026.

FY24 Guidance: PLD raised the outlook for net earnings per share to $3.25 to $3.45 (from $3.15-$3.35) and revised guidance for core FFO attributable to common stockholders to $5.39 to $5.47 (from $5.37-$5.47), and against the consensus of $5.41.

The company reiterated average occupancy guidance of 95.75%-96.75% in FY24.

Hamid R. Moghadam, co-founder and CEO, said, “While customer demand remains subdued, it is improving, and we expect that trend to continue as the construction pipeline shrinks. Meanwhile, our premier global portfolio will continue to benefit from its embedded NOI potential, and opportunities in data centers and energy give us tremendous confidence in future growth.”

Timothy D. Arndt, chief financial officer, stated, “In addition, during the quarter we raised $1.2 billion of debt across our balance sheet and funds, and we launched our $1 billion commercial-paper program, already saving us more than 60bps on our short-term borrowing costs in the U.S.”

Investors can gain exposure to the stock via Pacer Industrial Real Estate ETF INDS and SP Funds S&P Global REIT Sharia ETF SPRE

Price Action: PLD shares are up 5.13% at $127.72 at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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