UPDATE: Evercore ISI Upgrades ProLogis (PLD) to Outperform

September 27, 2022 5:53 AM EDT
Get Alerts PLD Hot Sheet
Price: $114.60 --0%

Rating Summary:
    24 Buy, 5 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 7 | Down: 30 | New: 17
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(Updated - September 27, 2022 5:53 AM EDT)

Evercore ISI analyst Steve Sakwa upgraded ProLogis (NYSE: PLD) from Underperform to Outperform with a price target of $127.00.

The analyst comments "We are upgrading Prologis (PLD) to an O/P rating from I/L with a revised PT of $127 given the stock’s recent underperformance (down 16.6% over the last 30 days versus REITs down 12.3%) and compelling valuation. While the industrial sector is not immune to a recession given the cyclical nature of the business, PLD will continue to generate very strong growth over the next several years. In our model we have PLD generating NOI growth of 7.5% on average over the next three years which is well above the REIT average. The company’s strong balance sheet mixed with its high-quality portfolio that has significant mark to market upside are attributes that will help the company manage its business through the economic downturn. We attribute the stock’s underperformance to growing concerns over the health of the economy and this has certainly been exasperated by FedEx’s earnings results which were negatively impacted by falling demand and the company’s own commentary for an expectation of lower promote income in 3Q (and ’22). As a result, we recently reduced ’22 promote income for the European Fund (PELF) by 10¢ which was just a 2% impact to earnings and ’23 promote income by 7¢ from the US Fund as we assume market values have been impacted in recent months (down roughly 5% in ’22 in our assumption). Management recently stated that there is volatility in promotes as appraisers look at recent comps in the market which can impact the fair value of their assets."

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 $104.16 yesterday.

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