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Prologis Inc PLD

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Raising ProLogis' Fair Value Estimate to $107 on Strong Second-Quarter Results and Increased Outlook

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

No-moat ProLogis reported strong second-quarter results and raised its 2021 guidance for the second straight quarter, leading us to raise our fair value estimate to $107 from $92. Same-store occupancy increased 60 basis points sequentially to 96.0%, in line with our estimates. Meanwhile, same-store net operating income grew 5.8% year over year, well above what the company had produced over the prior several quarters. The second-quarter result was also the third straight quarter of accelerating same-store NOI growth, which led management to increase its 2021 NOI guidance by 75 basis points to a new range of 5.25% to 5.75%. We similarly revised our short-term fundamental outlook upward for ProLogis as we believe it will continue to benefit from the current leasing environment that is driving rates higher for the next few years. The strong internal growth led to ProLogis reporting core funds from operations of $1.01 in the second quarter, slightly ahead of our estimate, and led to management raising its 2021 core FFO guidance by 7 cents at the midpoint to a new range of $4.04 to $4.08.

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Company Profile

Business Description

Prologis was formed by the June 2011 merger of AMB Property and ProLogis Trust. The company develops, acquires, and operates over 900 million square feet of high-quality industrial and logistics facilities across the globe. The company is organized into four global divisions (Americas, Europe, Asia, and other Americas) and operates as a real estate investment trust.

Pier 1, Bay 1
San Francisco, CA, 94111
T +1 415 394-9000
Sector Real Estate
Industry REIT - Industrial
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 1,945

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