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Prologis Stock Rises After Q3 Profit Doubles, FFO Beats Estimate

Prologis shares rose after the world’s largest industrial REIT reported third-quarter results that beat expectations and lifted guidance.
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Prologis  (PLD) - Get Prologis, Inc. Report shares rose Friday after the world’s largest industrial REIT reported third-quarter results that beat expectations and lifted guidance.

The San Francisco real estate investment trust's profit more than doubled to $722 million, or 97 cents a share, from $298.7 million, or 40 cents a share, in the year- earlier period.

Revenue climbed 9.3% to $1.18 billion, beating the FactSet analyst consensus of $1.04 billion.

Core funds from operations hit $1.04 a share, up 16% from 90 cents a year earlier. The latest figure topped the FactSet consensus analyst estimate of $1.03.

Record gains in rent and property valuations helped the performance.

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Prologis boosted its core FFO guidance projection for all of 2021 to a range of $4.11 to $4.13 from its previous projection of $4.04 to $4.08. The latest range topped the analyst forecast of $4.07.

The stock recently traded at $138, up 1.7%. It has moved up 36% year to date amid strong demand for warehouse space thanks to the explosion of online shopping.

Prior to the earnings report, Morningstar analyst Kevin Brown put fair value at $137 for Prologis.

“We are increasing our fair-value estimate for no-moat Prologis after changing our cost-of-equity estimate and revising our assumptions for the company's development pipeline,” he wrote last month.

“The industrial sector proved to be very resilient during the recession caused by the pandemic, and Prologis produced significant growth through the whole period.

“While we recognize that future recessions may cause more disruption to industrial and warehouse space, ... the long-term leases signed by most industrial tenants should insulate the company from significant cash-flow declines.”