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1. Company Snapshot

1.a. Company Description

Prologis, Inc.is the global leader in logistics real estate with a focus on high-barrier, high-growth markets.As of December 31, 2020, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 984 million square feet (91 million square meters) in 19 countries.


Prologis leases modern logistics facilities to a diverse base of approximately 5,500 customers principally across two major categories: business-to-business and retail/online fulfillment.

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1.b. Last Insights on PLD

Prologis' recent performance was driven by a strong quarterly earnings report, with revenue of $2.05 billion, 1% higher than forecast. The company's strategic data center push and steady dividend growth make it a compelling REIT pick. Its prime logistics hubs and data center conversions drive growth. A beat-and-raise quarterly earnings report led to increased investor confidence. The company's Q3 earnings call highlighted its strong fundamentals. Leasing delays and rising interest expenses could temper momentum.

1.c. Company Highlights

2. Prologis' Strong Q4 and 2025 Performance Sets Stage for Constructive 2026

Prologis delivered a robust fourth quarter, capping off a strong year with core FFO of $1.44 per share, including net promote expense, and $1.46 per share, excluding net promote expense, surpassing estimates of $1.44. The actual EPS came out at $1.55, beating expectations. For the full year, the company finished at the top end of both its most recent and inaugural guidance ranges. The strong financial performance was driven by disciplined execution and deep engagement with customers, resulting in 57 million square feet of leases signed in the quarter and occupancy driving toward 96%.

Publication Date: Jan -22

📋 Highlights
  • Strong Q4 Performance:: Signed 57M sq ft of leases, driving occupancy toward 96%, with Core FFO at $1.44/share (including net promote expense) and $1.46/share (excluding).
  • 2026 Guidance:: Projects 94.75–95.75% occupancy, 4.25–5.25% net effective same-store growth, and $4B–$5B in development starts (40% in data centers).
  • Data Center Momentum:: 1.2 GW under LOI/advanced negotiations, with a 10-GW power pipeline (6 GW already achieved), focused on Tier 1/2 markets like Northern Virginia and London.
  • Occupancy & Rents Recovery:: U.S. vacancy dropped to 7.4% in Q4 (first absorption > completions since 2022), with 25 bps occupancy gain expected in 2026 to reach 95.8%.

Operational Highlights

The company's operational momentum is evident in the 59 million square feet of net absorption in the U.S. during the fourth quarter, a strong finish to the year. This resulted in a decline in U.S. vacancy to 7.4%. The company is seeing a build-up in occupancy followed by an inflection in rents across its geographies, setting up a constructive 2026. Prologis is guiding for average occupancy ranging between 94.75% and 95.75% and net effective same-store growth forecasted to be in a range of 4.25% to 5.25% in 2026.

Guidance and Outlook

The company is forecasting development starts to range between $4 billion and $5 billion on an owned and managed basis, with acquisitions ranging between $1 billion and $1.5 billion. GAAP earnings guidance is in a range of $3.7 to $4 per share, while core FFO, including net promote expense, will range between $6 and $6.2 per share. The company expects positive rent growth in aggregate to emerge more clearly over the course of the year, driven by easier occupancy comps and lighter FPLA.

Valuation and Growth Prospects

With a P/E Ratio of 37.98 and an expected revenue growth of 7.1% next year, the market is pricing in significant growth prospects for Prologis. The Dividend Yield stands at 3.08%, indicating a relatively attractive return for investors. The company's ROIC of 4.01% and ROE of 6.03% suggest a decent return on capital, although there is room for improvement. As the company continues to execute on its priorities, including enhancing shareholder returns through continued growth in assets under management, investors will be watching closely to see if Prologis can deliver on its growth prospects.

Data Center Opportunity

The data center opportunity is a significant growth driver for Prologis, with 1.2 gigawatts under LOI and 60% to 70% expected to be powered shell. The company has access to over 5 gigawatts of power, dispersed across Tier 1 and Tier 2 markets in the US and Europe. This positions Prologis well to capitalize on the growing demand for data center capacity, and the company's 10-gigawatt power pipeline is an opportunity universe that is expected to drive growth in the coming years.

3. NewsRoom

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3 REITs to Buy Before President Trump's New Fed Chair Cuts Interest Rates

Feb -08

Source: fool.com

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Prologis, Inc. (NYSE:PLD) Receives Average Rating of “Moderate Buy” from Analysts

Feb -06

Source: defenseworld.net

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Prologis Might Fund Data Centers With New Pool of Investor Capital

Feb -04

Source: wsj.com

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AGF Management Ltd. Acquires 6,155 Shares of Prologis, Inc. $PLD

Feb -04

Source: defenseworld.net

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Thrivent Financial for Lutherans Decreases Stake in Prologis, Inc. $PLD

Feb -04

Source: defenseworld.net

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FIBRA Prologis Declares Quarterly Distribution

Feb -04

Source: prnewswire.com

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Raleigh Capital Management Inc. Raises Holdings in Prologis, Inc. $PLD

Feb -03

Source: defenseworld.net

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Forget AI Stocks: This REIT Could Be Your Ticket to AI Profits

Feb -01

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.70%)

6. Segments

Real Estate Operations - U.S.

Expected Growth: 5.0%

The U.S. is a significant market for Prologis with a strong and stable economy. E-commerce growth drives demand for logistics facilities, potentially leading to higher growth than the global average. The slight premium over the global growth hypothesis reflects this.

Real Estate Operations - Other Americas

Expected Growth: 5.2%

Emerging markets within this segment, such as Mexico, may offer higher growth opportunities due to increasing demand for logistics infrastructure driven by trade agreements like USMCA. This justifies a slightly higher growth rate than the global hypothesis.

Real Estate Operations - Europe

Expected Growth: 4.5%

While Europe is a mature market, the growth might be slightly constrained due to regulatory complexities and varying economic conditions across the continent. Thus, a slightly lower growth rate than the global hypothesis is reasonable.

Real Estate Operations - Asia

Expected Growth: 6.0%

The Asian market, particularly China, is expected to drive growth due to the rapid expansion of e-commerce and the continued importance of manufacturing in the region. This justifies a higher growth rate than the global hypothesis.

Unallocated Earnings from Unconsolidated Entities, Net

Expected Growth: 4.7%

The growth in this segment is assumed to align with the global growth hypothesis as it is diversified across various geographies and entities, thus mirroring the overall company growth expectation.

Strategic Capital - U.S.

Expected Growth: 5.0%

Similar to Real Estate Operations - U.S., this segment benefits from the strong U.S. economy and e-commerce driven demand, justifying a growth rate slightly above the global hypothesis.

Strategic Capital - Europe

Expected Growth: 4.5%

The rationale is similar to Real Estate Operations - Europe, with a slightly lower growth rate due to the mature nature of the market and potential regulatory challenges.

Strategic Capital - Other Americas

Expected Growth: 5.2%

The growth prospects are similar to Real Estate Operations - Other Americas, driven by emerging markets and trade agreements, justifying a higher growth rate.

Strategic Capital - Asia

Expected Growth: 6.0%

Similar to Real Estate Operations - Asia, the growth is driven by the rapid expansion of e-commerce and manufacturing in the region, justifying a higher growth rate than the global hypothesis.

7. Detailed Products

Logistics Real Estate

Prologis offers a range of logistics real estate solutions, including warehouses, distribution centers, and manufacturing facilities, to help businesses optimize their supply chain operations.

Supply Chain Solutions

Prologis provides customized supply chain solutions, including transportation management, inventory management, and order fulfillment, to help businesses streamline their logistics operations.

Last Touch

Prologis' Last Touch solution provides a network of urban logistics facilities and services, enabling businesses to offer fast and flexible delivery options to customers in urban areas.

Prologis Essentials

Prologis Essentials offers a range of value-added services, including facility management, maintenance, and repair, to help businesses optimize their logistics operations.

Development and Investment

Prologis provides development and investment services, including land acquisition, development, and property management, to help businesses optimize their logistics real estate portfolios.

8. Prologis, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Prologis, Inc. faces moderate threat from substitutes due to the availability of alternative logistics and supply chain management services.

Bargaining Power Of Customers

Prologis, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Prologis, Inc. relies on a network of suppliers for construction materials, labor, and other services, giving them some bargaining power, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The logistics and supply chain management industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with Prologis, Inc.

Intensity Of Rivalry

The logistics and supply chain management industry is highly competitive, with several established players competing for market share, making it essential for Prologis, Inc. to differentiate itself through innovative services and strategic partnerships.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.29%
Debt Cost 3.95%
Equity Weight 64.71%
Equity Cost 9.22%
WACC 7.36%
Leverage 54.53%

11. Quality Control: Prologis, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Quality: 7.2

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A-Score: 6.2/10

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Quality: 6.7

Yield: 6.0

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Volatility: 8.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

136.95$

Current Price

136.95$

Potential

-0.00%

Expected Cash-Flows