Trump to visit Fed on Thursday amid Powell feud, renovation probe
On Wednesday, Evercore ISI analyst Steve Sakwa revised the price target for ProLogis (NYSE:PLD) stock, reducing it from $111.00 to $106.00, while keeping an In Line rating. The stock, currently trading at $100.29, sits well above its 52-week low of $85.35 but significantly below its high of $132.57. According to InvestingPro analysis, ProLogis is currently trading near its Fair Value, suggesting the market has efficiently priced the stock. This adjustment followed the company’s first-quarter results, which were disclosed before the market opened on Wednesday. ProLogis reported a core Funds From Operations (FFO) of $1.42, surpassing both Evercore ISI’s estimate of $1.37 and the consensus of $1.38. The company outperformed expectations due to lower General & Administrative (G&A) expenses, decreased promote expense, and higher development and management income, despite initial assumptions of a 2-cent drag from promote expense in Q1.
ProLogis has decided to maintain its full-year 2025 core FFO guidance range of $5.65 to $5.81, aligning with Evercore ISI’s projection of $5.72 and the consensus estimate of $5.73. The company, which InvestingPro data shows has maintained dividend payments for 15 consecutive years with an attractive 4.1% yield, continues to demonstrate strong financial health with a "GOOD" overall score in InvestingPro’s comprehensive assessment framework. However, ProLogis has lowered most of its capital deployment guidance items, including development starts, stabilizations, development gains, contributions, and dispositions. The company now expects average occupancy to decrease by 100 basis points year-over-year to 95.0%, within a range of 94.5% to 95.5%, even in a stressed environment. This is a shift from their previous expectation of an increase in occupancy in the latter half of the year.
During the earnings call on Wednesday afternoon, ProLogis noted a decline in demand since the announcement of tariffs at the beginning of April, with leasing activity down by 20%. Despite the better-than-expected Q1 results, the uncertainty surrounding tariffs has led management to maintain the FFO guidance for the year while adjusting capital deployment figures that are within their control.
Evercore ISI has updated their model with the Q1 results and made adjustments to their operating and external growth assumptions based on ProLogis’s revised outlook and conference call commentary. The company maintains solid fundamentals with a 76% gross profit margin and healthy returns, as revealed by InvestingPro’s detailed analysis. For investors seeking deeper insights, InvestingPro offers additional ProTips and a comprehensive Pro Research Report, which provides expert analysis on this prominent Industrial REITs player. While their 2025 core FFO estimate has been slightly reduced from $5.72 to $5.71, their 2026 estimate has been lowered by nearly 2% from $6.17 to $6.06, compared to the street’s estimate of $6.18. The price target has been adjusted downward by $5, a 4.5% decrease, due to lower estimates and a 30 basis point increase in the applied capitalization rate for Net Asset Value (NAV) purposes. Evercore ISI continues to evaluate the portfolio with an expected unlevered Internal Rate of Return (IRR) in the mid-7% range but with slower Net Operating Income (NOI) growth.
In other recent news, Prologis Inc. reported its first-quarter 2025 earnings, revealing a slight miss on earnings per share (EPS) expectations, with an actual EPS of $0.63 compared to a forecast of $0.64. However, the company exceeded revenue expectations, reporting $2.14 billion against the anticipated $1.96 billion. This strong revenue performance reflects effective leasing and rent strategies, despite a slight decrease in occupancy to 95.2%. Additionally, Prologis maintains its core funds from operations (FFO) guidance of $5.65-$5.81 per share for the year, with a strategic focus on sustainability and innovation.
Moody’s upgraded Prologis to an A2 rating this quarter, making it one of only two public REITs with an A flat rating from both major agencies. This reflects the company’s strong balance sheet and access to global capital. Despite global trade uncertainties, Prologis’ executives emphasized the company’s resilience and adaptability in the industrial real estate market. Analyst firms have not made any recent upgrades or downgrades regarding Prologis’ stock.
Prologis also reported significant leasing activity, with 58 million square feet leased in the quarter. The company is focusing on expanding its power capacity and solar initiatives to support growing demand for data centers. Prologis continues to anticipate growth in e-commerce and increased inventory levels, with potential market benefits in regions like Mexico and India.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.