CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Despite earnings beat, we lower our target price by $10 to $131 using a forward P/FFO of 23.0x our 2024 FFO estimate, a premium to peers due to PLD’s above-average growth potential (five-year FFO CAGR of 12% vs. 9% peers) and strong balance sheet. We keep our 2023 FFO estimate at $5.62 and 2024’s at $5.68. PLD reported Q3 2023 FFO of $1.30 vs. $1.73, a $0.05 consensus beat on revenues that came in 2% above consensus. Same-store cash net operating income (SSNOI) growth remained robust at 9.5% Y/Y as industry conditions remain tight despite higher interest rates and continued recessionary fears. Average occupancy remained strong at 97.1%, down 40 bps Q/Q, as cash rental rates rose a company record 54.2%. We continue to forecast exceptional rental rate growth moving forward as mark-to-market rents in the portfolio remain high at 62%. PLD’s best-in-class balance sheet maintains about $6.9B in liquidity, modest leverage of 4.3x, minimal floating rate debt (7.9%), and has no significant maturities due until 2026.