UBS maintains Prologis stock rating at Buy with $120 price target

Investing.com - UBS has reiterated its Buy rating on Prologis (NYSE:PLD) with a price target of $120.00, citing the company’s strong second-quarter performance and large leasing pipeline. Currently trading at $107.06, the stock has analyst targets ranging from $95 to $150, with InvestingPro data showing the company maintains a "GOOD" overall financial health score.

Prologis reported second-quarter 2025 funds from operations (FFO) per share excluding promote of $1.47, exceeding consensus estimates of $1.42. The company also updated its 2025 FFO guidance to $5.80-$5.85 per share from its previous range of $5.70-$5.86. With a robust gross profit margin of 76.26% and consistent dividend payments for 15 consecutive years, Prologis demonstrates strong operational efficiency.

UBS noted that proposal activity for Prologis increased sequentially by 26% to a record high of 136 million square feet (MSF), indicating strong potential demand for warehouse space. The company’s leasing pipeline now stands at 130 MSF, which UBS believes will generate favorable leasing dynamics when released.

For full-year 2025, Prologis projects absorption of 75-100 MSF, despite first-half absorption of 49 MSF, suggesting second-half performance will be similar to the first two quarters. UBS acknowledges that the timing of when this pipeline will translate to actual leasing remains uncertain.

The investment firm points out that Prologis is currently trading at a next-twelve-month FFO multiple of 18.4x, which is 22% below its five-year average, suggesting low expectations are already priced into the stock. According to InvestingPro, the company currently trades near its Fair Value, with additional analysis and 7 more exclusive ProTips available to subscribers through the comprehensive Pro Research Report.

In other recent news, Prologis Inc. reported its second-quarter 2025 earnings, showcasing a mixed performance. The company recorded earnings per share (EPS) of $0.61, which fell short of the anticipated $0.69, yet revenue surpassed expectations at $2.04 billion against a forecast of $2.01 billion. Despite the earnings miss, Prologis’ stock experienced a positive pre-market reaction, reflecting investor confidence in its strategic initiatives. The company has increased its development starts guidance to a range of $2.25 billion to $2.75 billion, indicating a robust growth strategy. Occupancy rates saw a slight decline to 95.1%, down 10 basis points from the previous quarter, while the company continues to invest significantly in data center developments, particularly in Austin, Texas.

Prologis has also revised its core funds from operations (FFO) guidance to $5.75-$5.85 per share, suggesting a strong outlook. The company is maintaining its focus on logistics real estate, with strategic capital revenue guidance increasing to $570 million-$590 million. Analysts from firms such as Morgan Stanley (NYSE:MS) and Evercore ISI noted the company’s strong leasing pipeline and development starts, highlighting the firm’s resilience in a challenging market environment. Prologis’ management emphasized the strategic value of logistics real estate and the opportunities for future growth, despite ongoing tariff uncertainties and market saturation challenges.

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