With a market cap of $105.7 billion, San Francisco, California-based Prologis, Inc. (PLD) is a leading global logistics real estate company that specializes in high-barrier, high-growth markets. The company owns and operates 1.2 billion square feet of logistics facilities across 19 countries, serving approximately 6,700 customers primarily in business-to-business and retail/online fulfillment sectors.
Shares of the industrial real estate developer have underperformed the broader market over the past 52 weeks. PLD has risen 9.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 35.9%. In 2024, shares of PLD are down 14.4%, compared to SPX’s 25.8% gain on a YTD basis.
Zooming in further, PLD’s underperformance becomes more evident when compared to the Real Estate Select Sector SPDR Fund’s (XLRE) 26.6% gain over the past 52 weeks and 8.7% return on a YTD basis.
Shares of Prologis rose 4.6% on Oct. 16 after the company reported Q3 2024 core FFO per share of $1.43, beating the consensus estimate. The rise in stock price was also supported by an increase in rental revenues to $1.9 billion, driven by healthy leasing activity across its portfolio. Prologis also increased its 2024 core FFO guidance to $5.42 per share - $5.46 per share. The management’s positive outlook on improving supply conditions and stable demand further boosted investor confidence.
For the current fiscal year, ending in December, analysts expect PLD’s FFO to decline 2.9% year-over-year to $5.45 per share. However, the company’s earnings surprise history is promising. It beat or met the consensus estimates in the last four quarters.
Among the 23 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, one “Moderate Buy,” and eight Holds.”
This configuration is slightly less bullish than three months ago, with 15 “Strong Buy” ratings on the stock.
On Oct. 25, Scotiabank analyst Nicholas Yulico lowered Prologis's price target to $136 while maintaining an “Outperform” rating, citing the recent $3.5 billion Rockefeller Center financing as reinforcing the value of top-tier New York City office assets.
As of writing, PLD is trading below the mean price target of $134.77. The Street-high price target of $154, implies a potential upside of nearly 35% from the current price.
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.
