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On Thursday, UBS analyst Michael Goldsmith reaffirmed a Buy rating and a $106.00 price target on shares of ProLogis (NYSE: NYSE:PLD), a prominent player in the Industrial REITs industry with a market capitalization of $96 billion. According to InvestingPro data, analyst targets for the stock range from $95 to $150, reflecting mixed sentiment about the company’s resilience, particularly given its first quarter results of 2025.
ProLogis reported net effective rent growth of 53.7% for its share in the first quarter, surpassing the consensus estimate of 50.4% and following a previous quarter figure of 66.3%. Cash rents increased by 32.1%, which was slightly above the consensus of 31.6% but below UBS’s estimate of 40.0%. The company’s strong operational performance is complemented by its impressive dividend track record - InvestingPro analysis shows the company has maintained dividend payments for 15 consecutive years, with a current yield of 4.03%. The average occupancy rate for ProLogis’ share decreased by 100 basis points sequentially to 94.8%, aligning with both UBS’s and the consensus estimate of 95.1%.
The period-end occupancy rate also saw a decline of 70 basis points from the previous quarter, settling at 95.2%. ProLogis’ same-store net operating income (SSNOI) growth on a cash basis was 6.2%, a slight decrease from 6.7% in the fourth quarter of 2024. The GAAP SSNOI growth was 5.9%, down from 6.6% in the previous quarter.
Strategic capital generated revenues of $141 million, which was above both UBS’s estimate of $139 million and the consensus of $138 million. Despite these solid operational metrics, concerns about tariffs and the global economic environment have led to ProLogis’ near-term funds from operations (FFO) multiple trading at 18.9 times, which is below its five-year average of 23.9 times.
Goldsmith believes that as the market gains clarity on the economic backdrop and ProLogis’ ability to withstand challenges, there could be potential upside for the company’s stock. InvestingPro analysis reveals a "GOOD" overall financial health score, with particularly strong cash flow metrics. Subscribers to InvestingPro can access 6 additional exclusive ProTips and a comprehensive Pro Research Report, offering deeper insights into ProLogis’s financial strength and growth potential among 1,400+ top US stocks.
In other recent news, ProLogis 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’s revenue exceeded expectations, coming in at $2.14 billion against the anticipated $1.96 billion. Despite the minor EPS miss, the company outperformed expectations on core Funds From Operations (FFO), reporting $1.42 per share, surpassing both Evercore ISI’s estimate of $1.37 and the consensus of $1.38. ProLogis has maintained 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. However, the company has lowered most of its capital deployment guidance items, including development starts and stabilizations. Evercore ISI analyst Steve Sakwa revised the price target for ProLogis stock, reducing it from $111.00 to $106.00, while maintaining an In Line rating. The analyst firm updated their model with the Q1 results and made adjustments to their operating and external growth assumptions based on ProLogis’s revised outlook. 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.
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