Prologis Earnings: Fundamentals Should Start To Normalize in the Second Part of the Year

No-moat-rated Prologis’ second-quarter results were in line with our expectations as the firm reported core funds from operations, or FFO, of $1.83 per share, 65% higher than the $1.11 in FFO during the second quarter of 2022. The sharp rise in FFO during the second quarter can be mainly attributed to the promote income in the strategic capital segment. The real estate operations of the company, which exclude the strategic capital segment, reported a core FFO of $1.18 per share in the second quarter, 18% higher on a year-over-year basis. We are maintaining our $124 per share fair value estimate for Prologis after incorporating the second-quarter results.