Yesterday, I worked at a Prologis building, and after sending this letter, I’ll be headed to a different Prologis facility here in the Chicagoland area.
Yesterday, Prologis reported Q124 earnings, with FFO of $1.31 beats by $0.02 and revenue of $1.96B beats by $130M.
But their stock fell almost 2% because they cut guidance by about 1.3%.
Their CEO also said customers are focused more on controlling costs in this higher for longer interest rate environment, which could negatively impact leasing.
Like Ulta Beauty (ULTA), when a business says, “We expect to make less money going forward than we initially thought,” the market usually sells off.
Which can be a GREAT buying opportunity for long-term and patient investors.
There will always be opportunities because people will always do stupid things.
Like selling great businesses because their future earnings may temporarily be lower than expected.
Check out Prologis’ top 10 customers and types of goods in their buildings.
They’re not going anywhere anytime soon, but a recession will hurt them like almost all businesses.
I’d like this at under $100 and even closer to the high $80s.
Many market participants may finally be waking up to the idea that ZIRP (Zero Interest Rate Policy) is long gone and HFL (Higher For Longer) is here to stay.
This might be why Prologis (PLD) is down 18% in the past month.
They are a gigantic REIT with almost a $100B market cap, and SimplySafeDividends.com gives it a safety score of 61.
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Source: SimplySafeDividends.com |
While its dividend hasn’t returned to where it was before the last recession, it has been growing for 10 years.
I gotta get to my job now where Prologis’ customer is a company that repackages Frito-Lay products into those multi-pack cases you see at the store.
And if you didn’t know, PepsiCo (PEP) owns Frito-Lay, so I’ll be surrounded by two dividend-paying businesses this morning!
Thanks for reading, and stay tuned for the Sunday portfolio update edition.
~Russ Knopf
