BofA Securities upgrades ProLogis stock to Buy on growth outlook

Investing.com - BofA Securities upgraded ProLogis (NYSE:PLD), a prominent player in the Industrial REITs industry with a market capitalization of $108 billion, from Neutral to Buy on Tuesday, while raising its price target to $130.00 from $118.00. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, suggesting strong operational fundamentals.

The upgrade comes as BofA analyst Camille Bonnel cited ProLogis’ potential for high-single-digit annual FFO (funds from operations) growth in a normalized environment. This outlook aligns with the company’s strong track record, having achieved a 19% revenue CAGR over the past five years. Key growth drivers include embedded escalators, market rent growth, data center conversions, transactions, development, fund business, and essentials business.

BofA acknowledged some continuing challenges for the logistics real estate company, including weakness in Southern California markets, refinancing headwinds, and the potential for fundamentals to weaken for several quarters before improving.

The firm believes downside risks are largely priced into the stock, with market consensus already modeling 6% year-over-year growth for 2026. ProLogis currently trades at 24 times forward adjusted FFO, below its historical average of over 26 times.

BofA also noted that potential interest rate cuts could attract generalist and income investors to blue-chip stocks like ProLogis, which now offers a distribution yield of 3.57%. InvestingPro analysis reveals the company has maintained dividend payments for 15 consecutive years and has raised its dividend for 11 straight years, demonstrating strong commitment to shareholder returns. Get access to additional ProTips and comprehensive analysis with an InvestingPro subscription.

In other recent news, ProLogis reported its second-quarter results, maintaining its occupancy guidance and showing healthy mark-to-market expectations. The company also noted an increase in development starts, particularly in build-to-suit projects. Analysts have been active in adjusting their ratings and price targets for ProLogis. Scotiabank upgraded the stock from Sector Underperform to Sector Perform, citing a stable outlook and setting a price target of $114.00. Mizuho also upgraded ProLogis from Neutral to Outperform, raising the price target to $118.00 and highlighting an improved risk profile. Meanwhile, Citi reduced its price target to $140.00 due to trade policy uncertainty but maintained a Buy rating. KeyBanc reiterated its Sector Weight rating, noting that ProLogis’ quarterly performance exceeded expectations despite a slightly slower growth outlook for the second half of 2025. Additionally, STAG Industrial announced the promotion of Steven T. Kimball to Chief Operating Officer, effective recently.

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