On Friday, Prologis Inc. (NYSE:PLD) shares edged higher by 2% after announcing solid fiscal Q3 results. The company reported its most recent quarterly results before markets opened, beating analyst expectations on revenue and funds from operations (FFO). The company also boosted its guidance for FY 2021, pushing its FFO forecast ahead of expectations.
Prologis posted an FQ3 FFO per share of $1.04, slightly ahead of the consensus Street estimate of $1.03. On the other hand, revenue for the quarter grew by 9.3% Y/Y to $1.19 billion, $150 million ahead of estimates.
The company now expects to report FY2021 core diluted FFO per share of $4.11-$4.13, compared to the average Street forecast of $4.07.
Time to buy or sell PLD shares?
From an investment perspective, Prologis shares trade at a steep trailing 12-month P/E of 65.41 and a forward P/E of 64.69, making the stock less attractive to value investors. However, valuing the stock based on FFOs, PLD seems reasonably valued with a price-FFO ratio of 34.55.
Therefore, although the company’s bottom-line growth prospects are less exciting, some value investors could find it compelling after boosting FFO expectations.
Source – TradingView
Technically, Prologis shares seem to be trading within a sharply ascending channel formation. The stock recently bounced off the 100-day moving average, surging into overbought conditions of the 14-day RSI.
Therefore, with PLD shares trading at new all-time highs, the stock appears poised for an imminent pullback. As a result, investors could target potential pullback profits at about $134.12, or lower at $130.16. On the other hand, if the stock price continues to rise, it could find resistance at $142.14.
Time to short PLD shares?
In summary, although Prologis outperformed analyst expectations in its most recent quarterly results, the stock seems to have recently skyrocketed to overbought conditions, creating an opportunity for a pullback.
Therefore, given the company’s steep valuation multiples and weak growth outlook, it may be best to wait for the price to retreat towards a key support level before buying.
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