Prologis — the largest real estate investment trust in the world, with a market cap of $120 billion — recently scored a breakout from a buy point. Prologis stock has benefited hugely from the pandemic, which caused the REIT's business to sky rocket.
San Francisco-based Prologis is trading above the 160.95 buy point of a cup-with-handle base after scoring a breakout on March 28, according to MarketSmith pattern recognition. The stock followed through on the breakout in decent volume, while shares have been inside the buy zone for the past week. The stock's RS line, an indicator of strength relative to the overall market, is pretty stable and has been inching higher over the past several weeks.
The stock retook its 50-day moving average during the week of March 18. Shares are also well above their 200-day moving average. The current base formed entirely above this long-term area of support. Prologis stock has been forming the base since the beginning of January. But since hitting a low of just under 138 in late February, the stock has rallied back, with gains of over 10% last month.
Shares now remain slightly above the buy point and in the buy zone, which tops out at 168.99
Prologis Stock Among Top REITs To Watch
Prologis' business is flourishing due to the boom in e-commerce shopping. The coronavirus pandemic exacerbated this trend over the past few years, as more consumers have turned to online shopping in lieu of going to brick-and-mortar retailers.
The popular business model for e-commerce is that of Amazon.com, where operations rely on a network of fulfillment centers, (i.e., storage and distribution warehouses). These warehouse spaces are exactly the type of property Prologis specializes in. In fact, Amazon is one of Prologis' biggest customers.
Prologis' 2021 earnings paint the picture of its recent success. "Demand for our 1 billion square foot global portfolio shows no signs of slowing and we are positioned ideally to meet our customers' most critical real estate needs," said CEO Hamid R. Moghadam in a recent earnings release.
At the end of last year, its occupancy rate was nearly 97.5%. It owns buildings in 19 countries. After a difficult Q2 in 2021, which showed declining year-over-year growth for earnings and sales, the company boasts two straight quarters of growth in its top and bottom lines.
Over the past two quarters, EPS rose 16% and 18%, respectively, while sales grew 9% and 15%, according to MarketSmith data. The company sees continued double-digit EPS growth for full-year 2022 and 2023 of 14% and 11%, respectively.
Prologis is expected to announce first-quarter earnings on April 19 before the market opens.
