ProLogis stock rating upgraded by BMO Capital on data center strategy shift

Published 20/10/2025, 11:22
ProLogis stock rating upgraded by BMO Capital on data center strategy shift

Investing.com - BMO Capital upgraded ProLogis (NYSE:PLD) from Underperform to Market Perform and set a price target of $119.00. The stock, currently trading near its 52-week high of $125.05, has shown remarkable momentum with a 10% gain in the past week. According to InvestingPro analysis, the industrial REIT giant, valued at $115 billion, appears to be trading above its Fair Value.

The upgrade primarily reflects ProLogis’s strategic shift in its data center business, moving from a merchant developer model to an ownership and development approach that remains to be fully defined.

BMO Capital noted that while many factors about the new strategy remain unknown—including timing, mix of delivered product, and capital structure—the firm is encouraged that ProLogis will likely develop a recurring-income business leveraged to artificial intelligence demand.

The research firm acknowledged that ProLogis’s industrial warehouse segment has demonstrated resilient leasing activity, though BMO believes the segment will experience moderating near-term rent growth.

BMO Capital values ProLogis’s data center pipeline value creation at $6.7 billion, or $6.97 per share, which it considers additive to the company’s net asset value.

In other recent news, Prologis Inc. reported strong third-quarter 2025 earnings, surpassing Wall Street expectations with an earnings per share of $0.82, compared to the forecasted $0.67. The company also exceeded revenue forecasts, reporting $2.05 billion against the expected $2.03 billion. Following these results, Freedom Capital Markets raised Prologis’ stock price target to $134 from $128, maintaining a Buy rating. UBS also increased its price target for Prologis to $137 from $120, highlighting the company’s progress in industrial warehouse fundamentals and data center growth. Both firms have continued to support a Buy rating on the stock. These developments reflect Prologis’ record leasing activity and an increased full-year forecast. The positive earnings report and subsequent analyst upgrades indicate a strong performance by the logistics real estate company.

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