Based in San Francisco, Prologis, Inc. (PLD) is a provider of logistics real estate solutions with a focus on high-barrier, high-growth markets. Valued at a market cap of $112.9 billion, the company leases modern logistics facilities to a diverse base of customers, primarily across business-to-business and retail/online fulfillment categories.
Shares of this real estate giant have underperformed the broader market over the past 52 weeks. PLD has declined 2.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.6%. In 2024, shares of PLD are down 9.4%, compared to SPX’s 12% gain on a YTD basis.
Zooming the focus, PLD has also lagged behind the Pacer Benchmark Industrial Real Estate ETF’s (INDS) 4.2% gain over the past 52 weeks and a 3.4% decline on a YTD basis.
Prologis has underperformed due to high vacancy rates, oversupply in the industrial property sector, and rising interest rates, which have weakened demand and pressured its stock price. However, the stock rose 1.4% on Jul. 17 after its Q2 earnings release due to an upward revision of its full-year core funds from operations (FFO) forecast, driven by improved demand and strength in its data center business. Additionally, the company's total revenue exceeded estimates, signaling resilience despite ongoing economic challenges.
For the current fiscal year, ending in December, analysts expect PLD's EPS to decline 3.2% year over year to $5.43. The company's earnings surprise history is promising. It beat or met the consensus estimates in each of the last four quarters.
Among the 22 analysts covering the stock, the consensus rating is a “Strong Buy.” That is based on 15 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This configuration is slightly more bullish than three months before, with 14 analysts suggesting a "Strong Buy."
On Jul. 24, Citi maintained a “Buy” rating on Prologis and raised the price target to $150, noting the company's improving fundamentals and a slight increase in the estimated fiscal 2024 FFO.
The mean price target of $136.31 represents a premium of 11.8% to PLDs' current levels. The Street-high price target of $156, implies a potential upside of nearly 28% from the current price level.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
