Prologis, Inc. (PLD) shares are on the rise Wednesday morning after the leading industrial real estate company delivered solid third-quarter financial results that surpassed analysts’ expectations. The company’s earnings report showcased a strong demand environment and a positive outlook for the future, boosting investor confidence.
While Prologis’s rental revenue of $1.90 billion slightly missed the consensus estimate of $1.95 billion, the company achieved a remarkable 95.9% average occupancy rate, reflecting a robust demand for its warehouse and distribution facilities. This strong occupancy rate underscores the company’s dominant position in the market and its ability to attract and retain tenants.
A key highlight of the earnings report was Prologis’s exceeding expectations for Core Funds from Operations (FFO) per diluted share, reaching $1.43, compared to $1.30 a year ago and surpassing the consensus estimate of $1.37. This positive trend indicates the company’s ability to generate solid returns for its investors.
Prologis also provided revised guidance for fiscal year 2024, reflecting its positive outlook for the future. The company increased its forecast for core FFO attributable to common stockholders/unitholders to $5.42 – $5.46, compared to the previous range of $5.39 – $5.47, exceeding the consensus estimate of $5.42. Furthermore, Prologis raised its net earnings per share guidance to $3.35 – $3.45 from $3.25 – $3.45. These upward revisions indicate a strong confidence in the company’s future performance.
The company’s optimistic outlook is further strengthened by its recent debt issuance. During the quarter, Prologis and its co-investment ventures issued an aggregate of $4.6 billion in debt at a weighted average interest rate of 4.6% and a weighted average term of 8.9 years. This successful debt issuance provides Prologis with financial flexibility to pursue future growth opportunities.
In his statement, Hamid R. Moghadam, co-founder and CEO of Prologis, expressed confidence in the company’s long-term outlook, stating that “Looking ahead, the supply picture is improving, and the long-term demand drivers for our business remain strong.” He emphasized Prologis’s strategic position as a partner of choice for leading global customers, meeting their evolving needs in supply chain, digital, and energy infrastructure.
Investors interested in gaining exposure to the industrial real estate sector can consider investing in exchange-traded funds (ETFs) such as the Pacer Industrial Real Estate ETF (INDS) and the SP Funds S&P Global REIT Sharia ETF (SPRE). These ETFs offer a diversified way to invest in the sector, providing exposure to a basket of industrial real estate companies.
As of Wednesday morning, PLD shares are up 1.32% at $122.99 in premarket trading, signaling a positive market response to the company’s strong earnings report and positive outlook.