Analyst John Kim of BMO Capital maintained a Buy rating on Prologis (PLD – Research Report), with a price target of $145.00.
John Kim has given his Buy rating due to a combination of factors including Prologis’s solid leasing activity and stable debt metrics. Despite a challenging outlook with lowered guidance for 2024 and a notable slowdown in industrial demand, Prologis has demonstrated resilience. The company’s leasing activity has shown an impressive acceleration, with a 10.2% quarter-over-quarter increase, suggesting that the company maintains a strong ability to attract and retain tenants. Additionally, the company’s debt to adjusted EBITDA ratio remained constant, even after raising substantial debt, indicating prudent financial management.
Moreover, fee-related earnings have seen a positive uptick, which is remarkable against the backdrop of decreasing third-party assets under management (AUM). This points to effective cost control and revenue generation from the company’s services. Although there are concerns, such as a reduction in expected funds from operations (FFOps) and a decrease in same-store net operating income (SSNOI), Kim’s outlook appears to be optimistic about the company’s underlying strengths. These include Prologis’s ability to sustain revenue streams and manage debt effectively, suggesting that the stock’s current weaknesses may be temporary, providing a potential buying opportunity for long-term investors.
In another report released today, Barclays also maintained a Buy rating on the stock with a $135.00 price target.
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Prologis (PLD) Company Description:
Prologis, Inc. is a real estate investment trust which is engaged in the logistics real estate business. The company owns, operates and develops industrial real estate, with a focus on the consumption side of the global supply chain.
