Valued at a market cap of $106.6 billion, Prologis, Inc. (PLD) is a global leader in logistics real estate with a focus on high-barrier, high-growth markets. The San Francisco, California-based company leases modern logistics facilities to a diverse base of customers principally across two major categories, which are business-to-business and retail/online fulfilment.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and Prologis fits the label perfectly. As a leading real estate giant, it owns and manages $72 billion in total assets under management, more than 5,500 buildings comprising about 1.2 billion square feet of area across 19 countries and serves around 6,600 tenants.
Despite its strength, the industrial real estate company has declined 16.3% from its 52-week high of $137.52, achieved on Dec.14, 2023. Shares of PLD have declined 10.3% over the past three months, lagging behind the broader Real Estate Select Sector SPDR Fund’s (XLRE) marginal rise over the same time frame.
Moreover, in the longer term, Prologis has declined 13.7% on a YTD basis, significantly underperforming XLRE’s 9.7% returns. Shares of PLD are down 4.4% over the past 52 weeks, lagging behind XLRE’s 15% gains over the same time frame.
To confirm its bearish trend, PLD has been trading below its 200-day and 50-day moving averages since mid-October.
Despite soft market conditions marked by declining global market rents, PLD delivered a better-than-expected Q3 core FFO of $1.43 per share on Oct. 16, which improved 10% on an annual basis. Its rental revenues also increased 6.9% from a year ago to $1.9 billion, reflecting healthy leasing activity. Moreover, the company raised its full-year 2024 core FFO guidance. All of these factors led to a 4.6% rise in its share price that day.
PLD’s underperformance is evident when compared to its rival, American Tower Corporation (AMT) which declined marginally over the past 52 weeks and fell 3.9% on a YTD basis.
Despite PLD’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 23 analysts covering it, and the mean price target of $133.45 suggests a 16% premium to its current levels.
