Wells Fargo Upgrades ProLogis (PLD) to Outperform

June 17, 2013 6:53 AM EDT
Get Alerts PLD Hot Sheet
Price: $52.57 -0.36%

Rating Summary:
    14 Buy, 12 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Wells Fargo upgraded ProLogis (NYSE: PLD) from Market Perform to Outperform and raised its valuation range to $40.00 to $43.00 from $38.00 to $41.00 saying PLD offers a compelling growth opportunity at a reasonable value.

Analyst Brendan Maiorana comments, "We downgraded PLD in late January based on our more cautious stance on the industrial REIT universe (in conjunction with a sector downgrade) and our view that pricing from PLD’s large asset monetizations (NPR and Norges JV) was below our prior value estimates. Since PLD’s recent peak on May 21, shares are down -14.1% vs. -10.3% for the overall REIT Index. We think the company looks attractive now with solid prospects for internal growth (ssNOI outlook appears favorable and FFO/FAD should ramp-up) and strong prospects on the development pipeline."

He added, "The valuation also appears more reasonable, in our view - we estimate P/NAV at 6% premium (pure play industrial peers at 5% premium). Finally, we believe PLD offers downside protection as its balance sheet is now the most conservative in the industrial REIT sector."

The firm tweaked 2013E FFO to $1.62/share from $1.66/share due to near-term dilution from the equity raise and the delayed redeployment of capital from the recent Norges and NPR transactions.

For an analyst ratings summary and ratings history on ProLogis click here. For more ratings news on ProLogis click here.

Shares of ProLogis closed at $38.48 yesterday.

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