) crafted a new 52-week high, touching $43.33 in the second half
of the trading session on May 10. The closing price of this San
Francisco-based industrial real estate investment trust (REIT) on
May 10 was $43.32, representing a solid year-to-date return of
16.8%. The trading volume for the session was nearly 2.0 million
While this stock has hit a 52-week high, considering the estimate
revision trends over the last 30 days, we believe that this
upside is not likely in the near term for this Zacks Ranks #3
Factors to Consider
Prologis is endeavoring to capitalize on its global prospects.
With growth in e-Commerce, there is a rising demand for Class-A
facilities and the company stands to benefit as it has the
capacity to offer modern distribution facilities in strategic
infill locations. Moreover, leasing decisions that were earlier
postponed due to volatility in the markets are gradually coming
off the shelf.
Its build-to-suit deal in the first quarter with end-to-end
e-Commerce service provider - SpeedFC, a subsidiary of
) and the transaction with Chinese logistics provider, Deppon are
expected to contribute meaningfully to the company's top line.
On the flip side, continued troubles in the residential sector
have weighed on the company's commercial property operations. The
credit crunch has also widened the bid-ask spread between buyers
and sellers of commercial real estate, which has caused deal
volumes to fall compared with the pre-recession levels. In
addition, elevation in market vacancy will offset Prologis'
ability to push through rental rate increases.
On Apr 24, Prologis reported first quarter 2013 core FFO (funds
from operations) per share of 40 cents, in line with the Zacks
Consensus Estimate and the prior-year quarter figure.
Results reflect decent revenues in the reported quarter, and
completion of the Japan-REIT IPO as well as the European joint
venture. Moreover, its strategic measures have helped it lower
its overall debt level.
Additionally, Prologis has now delivered positive earnings
surprises in 2 of the last 4 quarters with an average beat of
Over the last 30 days, the Zacks Consensus Estimate for full-year
2013 FFO per share moved down 1.2% to $1.64. On the other hand,
the Zacks Consensus Estimate for 2014 FFO has moved up 1.7% to
$1.83 per share.
Last week, a number of other REITs also touched 52-week highs.
Highwoods Properties Inc.
Funds from operations, a widely accepted and reported measure
of REITs performance, are derived by adding depreciation,
amortization and other non-cash expenses to net income.
DDR CORP (DDR): Free Stock Analysis Report
HIGHWOODS PPTYS (HIW): Free Stock Analysis
NAVARRE CORP (NAVR): Free Stock Analysis
PROLOGIS INC (PLD): Free Stock Analysis
To read this article on Zacks.com click here.