Prologis stock rating upgraded by Mizuho on improved risk profile

Investing.com - Mizuho (NYSE:MFG) has upgraded Prologis (NYSE:PLD), a prominent player in the Industrial REITs industry with a market cap of nearly $100 billion, from Neutral to Outperform while raising its price target to $118.00 from $109.00. According to InvestingPro data, the company maintains a "GOOD" overall financial health score.

The upgrade comes after Mizuho maintained a negative stance on the industrial REIT sub-sector for over two years, citing a more supportive macro environment and a lowered risk profile specific to Prologis.

Mizuho noted that Prologis shares have underperformed the broader REIT group by approximately 400 basis points over the past 30 days, creating a potential tactical opportunity for investors.

The new price target of $118 represents approximately 12% upside potential and assumes a forward multiple at a modest premium to REITs, with Prologis currently trading at a 5% discount to the REIT sector. Based on InvestingPro’s Fair Value analysis, the stock is currently fairly valued. For deeper insights into Prologis’s valuation and 8 additional exclusive ProTips, subscribers can access the comprehensive Pro Research Report.

Despite the upgrade for Prologis, Mizuho maintains a neutral stance on the industrial REIT sub-sector overall, citing concerns about sub-par rent growth, potential supply risks, and slow tenant decision-making that could impact medium-term growth. The company’s revenue growth of 10% in the last twelve months and gross profit margin of 76% demonstrate its operational efficiency.

In other recent news, ProLogis reported its second-quarter 2025 earnings, showing a mixed performance. The company posted an earnings per share of $0.61, which fell short of the forecasted $0.69. However, revenue surpassed expectations, reaching $2.04 billion compared to the anticipated $2.01 billion. UBS maintained its Buy rating for ProLogis, setting a price target of $120, citing the strong quarterly performance and a substantial leasing pipeline. Meanwhile, Citi lowered its price target for ProLogis to $140 from $150, though it upheld its Buy rating, attributing the adjustment to trade policy uncertainty. KeyBanc reiterated its Sector Weight rating, noting that ProLogis’ quarterly results exceeded expectations, despite a slightly slower growth forecast for the latter half of 2025. Additionally, STAG Industrial announced the promotion of Steven T. Kimball to Chief Operating Officer. Kimball has been with STAG since early 2023 and previously held positions at PGIM Real Estate and Prologis.

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