Why Prologis Shares Are Trading Lower Today

Zinger Key Points
  • Prologis reported rental revenue of $1.83 billion, falling short of consensus estimates of $1.87 billion.
  • PLD lowered FY24 outlook for EPS and core FFO/Share due to anticipated lower average occupancy and competitive leasing.

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

Rental revenue of $1.83 billion missed the consensus estimates of $1.87 billion. The company’s average occupancy stood at 96.8%, with a leased 45.0MSF operating portfolio and a 3.1MSF development portfolio.

Core funds from operations per diluted share was $1.28, higher than $1.22 a year ago and in line with the consensus. Net earnings per share rose to $0.63 from $0.50 a year ago

During the quarter, Prologis and its co-investment ventures issued an aggregate of $4.1 billion of debt at a weighted average interest rate of 4.7% and a weighted average term of 9.5 years. 

FY24 Guidance Lowered: PLD cut the outlook for net earnings per share to $3.15-$3.35 (from $3.20-$3.45) and core FFO attributable to common stockholders to $5.37-$5.47 (from $5.42-$5.56), and against the consensus of $5.49.

The company now expects average occupancy of 95.75%-96.75% (vs. 96.50%-97.50% earlier) in FY24.

Hamid R. Moghadam, co-founder and CEO, said, “While we had a successful first quarter, we expect net absorption in the upcoming quarters to be lower than our prior expectations and leasing to stay competitive in a handful of our larger, higher-rent markets.” 

“With that, our current view calls for lower average occupancy in the year. Accordingly, we have reduced full-year guidance ranges for occupancy, same-store growth and earnings, but view the adjustments more as a matter of timing as the outlook on new supply remains very favorable.” 

“At the midpoint, we project Core FFO growth, excluding promotes, of nearly 8%, and Cash Same Store NOI growth to be 6.75%. While our Southern California portfolio faces near-term headwinds, we remain very positive about long-term growth and value given the market’s supply barriers and secular forces driving future demand.”

Investors can gain exposure to the stock via Pacer Industrial Real Estate ETF INDS and Fidelity Real Estate Investment ETF FPRO.

Price Action: PLD shares are trading lower by 4.57% to $109.50 on the last check Wednesday.

Photo via Wikimedia Commons

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsEquitiesLarge CapNewsGuidanceMoversBriefswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!