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Prologis (PLD)
NYSE:PLD
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Prologis
(NYSE:PLD)81Outperform
Positive Factors
Leadership Stability
The transition of leadership at Prologis is well planned with strategic guidance continuing from the outgoing CEO.
Leasing Performance
PLD has seen leasing activities accelerate with multiple encouraging signs, including a record-setting 60 million square feet of leases in 4Q24.
Negative Factors
Valuation Concerns
PLD screens expensive vs. the 10-yr, which is difficult to justify with its embedded growth declining rapidly.
Prologis (PLD) vs. S&P 500 (SPY)
Market Cap
$117.86B
Dividend Yield3.19%
Average Volume (3M)3.37M
Price to Earnings (P/E)31.0
Beta (1Y)1.25
Revenue Growth2.22%
EPS Growth23.71%
CountryUS
Employees2,703
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)3.94
Shares Outstanding926,860,000
10 Day Avg. Volume3,454,633
30 Day Avg. Volume3,366,854
Financial Highlights & Ratios
PEG Ratio1.31
Price to Book (P/B)N/A
Price to Sales (P/S)14.02
Price to Cash Flow (P/CF)21.50
P/FCF Ratio18.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$128.50Price Target Upside7.16% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
Prologis Business Overview & Revenue Model
Company DescriptionPrologis, Inc. (PLD) is a leading global logistics real estate company, headquartered in San Francisco, California. It specializes in the ownership, operation, and development of industrial properties and logistics infrastructure. Prologis serves a diverse range of sectors, including e-commerce, automotive, retail, and consumer goods, providing critical space for distribution centers and warehouses that facilitate the efficient movement and storage of goods.
How the Company Makes MoneyPrologis makes money primarily through the leasing of its vast portfolio of logistics facilities to a wide array of clients across various industries. The company's revenue model is primarily based on rental income from these leases, which are typically long-term agreements providing stable and predictable cash flows. In addition to leasing, Prologis generates revenue through development services by building new facilities tailored to specific client needs and then leasing or selling them. The company also earns fees from property management and development services provided to third parties and co-investment ventures. Strategic partnerships with large retailers, logistics companies, and e-commerce businesses further enhance its revenue streams, as these partnerships often lead to long-term leasing agreements and development projects.
Prologis Financial Statement Overview
Summary
Prologis has demonstrated strong revenue growth and profitability, supported by efficient operations and a robust balance sheet with no debt. Despite a slight decline in free cash flow, the company maintains strong cash flow ratios, highlighting its ability to generate cash and manage capital effectively. These financial strengths position Prologis well for future growth and stability.Income Statement
Prologis has shown strong revenue growth with a compound annual growth rate of around 18% over the past five years. The gross profit margin is consistently at 100% due to the nature of its REIT operations, and the net profit margin in the latest year is approximately 45% indicating high profitability. EBIT and EBITDA margins have shown improvement, standing at 54% and 64% respectively for 2024, reflecting effective cost management and operational efficiency.88
Very Positive
Balance Sheet
Prologis maintains a strong balance sheet with zero debt in 2024, significantly reducing financial risk. The equity ratio is high at around 57%, indicating a solid equity base relative to total assets. ROE is approximately 7% in 2024, which, while moderate, reflects consistent returns on equity investment. Overall, the company demonstrates financial stability with minimal leverage.85
Very Positive
Cash Flow
The company exhibits a strong cash flow position with a free cash flow growth rate of approximately -9% from 2023 to 2024, primarily due to changes in operating cash flow. The operating cash flow to net income ratio is robust at 1.32, indicating efficient conversion of income into cash. With a free cash flow to net income ratio of 1.32, Prologis effectively generates cash relative to its earnings.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.20B | 8.02B | 5.97B | 4.76B | 4.44B | Gross Profit |
| 6.14B | 6.01B | 4.46B | 3.51B | 3.27B | EBIT |
| 4.42B | 3.71B | 2.57B | 2.01B | 1.69B | EBITDA |
| 7.53B | 6.57B | 4.40B | 3.60B | 3.26B | Net Income Common Stockholders |
| 3.73B | 3.06B | 3.36B | 2.94B | 1.48B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.32B | 530.39M | 278.48M | 556.12M | 598.09M | Total Assets |
| 95.33B | 93.02B | 87.90B | 58.49B | 56.07B | Total Debt |
| 31.49B | 29.60B | 25.41B | 18.16B | 17.34B | Net Debt |
| 30.18B | 29.07B | 25.14B | 17.61B | 16.74B | Total Liabilities |
| 36.71B | 35.20B | 30.03B | 20.74B | 19.74B | Stockholders Equity |
| 53.95B | 53.18B | 53.24B | 33.43B | 31.97B |
| Cash Flow | Free Cash Flow | |||
| 4.91B | 5.37B | 3.58B | 2.50B | 1.69B | Operating Cash Flow |
| 4.91B | 5.37B | 4.13B | 3.00B | 2.94B | Investing Cash Flow |
| -3.10B | -6.42B | -4.50B | -1.99B | -3.07B | Financing Cash Flow |
| -999.96M | 1.32B | 115.79M | -1.01B | -372.16M |
Prologis Technical Analysis
Neutral
119.91
Price Trends
115.53
Positive
114.85
Positive
116.38
Positive
Market Momentum
1.44
Positive
49.59
Neutral
40.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLD, the sentiment is Neutral. The current price of 119.91 is below the 20-day moving average (MA) of 121.33, above the 50-day MA of 115.53, and above the 200-day MA of 116.38, indicating a neutral trend. The MACD of 1.44 indicates Positive momentum. The RSI at 49.59 is Neutral, neither overbought nor oversold. The STOCH value of 40.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PLD.
Prologis Risk Analysis
Prologis disclosed 28 risk factors in its most recent earnings report. Prologis reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Prologis Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $117.86B | 30.97 | 6.97% | 3.19% | 2.22% | 23.71% | |
80 Outperform | $7.84B | 26.56 | 10.99% | 2.57% | 9.06% | 4.57% | |
79 Outperform | $7.06B | 35.77 | 5.53% | 4.05% | 8.41% | -2.96% | |
74 Outperform | $9.44B | 34.41 | 3.38% | 4.03% | 17.48% | 7.45% | |
73 Outperform | $9.65B | 39.85 | 7.72% | 2.88% | 12.35% | 5.59% | |
73 Outperform | $6.80B | 35.56 | 5.59% | 2.76% | 18.24% | 6.95% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
PLD
Prologis
119.91
-9.98
-7.68%
EGP
Eastgroup Properties
184.42
9.71
5.56%
STAG
Stag Industrial
36.78
0.16
0.44%
TRNO
Terreno Realty
68.40
5.94
9.51%
FR
First Industrial Realty
57.50
6.02
11.69%
REXR
Rexford Industrial Realty
40.45
-10.58
-20.73%
Prologis Earnings Call Summary
Earnings Call Date: Jan 21, 2025 | % Change Since: 9.53% | Next Earnings Date: Apr 22, 2025
Earnings Call Sentiment Neutral
Prologis reported strong leasing activity and financial performance, with successful expansion in their data center and energy businesses. However, challenges such as the impact of the Los Angeles wildfires, a decline in market rent, and a cautious approach to development starts indicate an uncertain economic environment. Despite these challenges, the positive aspects suggest optimism for future growth.Highlights
Record Leasing Activity
Prologis signed more than 60 million square feet of leases, setting a company record with diversified interest across customer profiles, size requirements, and markets.
Strong Financial Performance
Core FFO, excluding Net Promote Income, was $1.42 per share and including net promotes was $1.50 per share. Full year results ended at the top end of guidance, representing 8.4% growth over 2023.
Elk Grove Data Center Success
Sale of Elk Grove data center in Chicago resulted in a value creation fee of $112 million, showcasing Prologis' data center development capabilities.
International Portfolio Outperformance
Non-U.S. portfolio fared better in rent growth over 2024, with significant growth in Japan, the U.K., Southern Europe, and Latin America.
Data Center and Energy Business Expansion
Prologis anticipates hitting a 1-gigawatt goal for solar generation and storage by year-end 2025, showing growth in energy initiatives.
Lowlights
Impact of Los Angeles Wildfires
Operations in Los Angeles affected by devastating wildfires, impacting colleagues, customers, and communities.
Decline in Market Rent
Rents declined roughly 2% in the quarter, with Southern California experiencing a 25% decline on a net basis.
Lower Development Starts
Development starts were deliberately slowed, with a forecasted range of $2.25 billion to $2.75 billion in 2025, lower than historical levels.
Uncertainty in Economic Environment
Factors such as tariffs, geopolitical concerns, and potential recession create uncertainty, affecting decision-making by tenants and investors.
Company Guidance
During the Prologis Q4 2024 earnings call, the management provided guidance for 2025, highlighting several key metrics and expectations. They forecasted average occupancy to range between 94.5% and 95.5%, with net effective same-store growth projected at 3.5% to 4.5% and cash growth at 4% to 5%. The guidance also included a G&A forecast of $440 million to $460 million and strategic capital revenue of $560 million to $580 million. Development starts were estimated to be between $2.25 billion and $2.75 billion, with acquisitions expected to range from $750 million to $1.25 billion. The company set its initial GAAP earnings guidance between $3.45 and $3.70 per share, with Core FFO, including net promote expense, ranging from $5.65 to $5.81 per share. Prologis also aimed to reach its 1-gigawatt goal for solar generation and storage by the end of 2025, underscoring its focus on energy initiatives.Prologis Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Prologis Announces CEO Transition with Dan Letter
Neutral
Feb 19, 2025
Prologis announced a leadership transition with CEO Hamid R. Moghadam set to retire on January 1, 2026, after over four decades of leadership. Dan Letter, the current President, will succeed Moghadam as CEO and has been appointed to the Board of Directors as of February 19, 2025. This transition is part of Prologis’s strategic planning to ensure continued growth and leverage Letter’s extensive experience within the company.
Executive/Board Changes
Prologis Announces CEO Transition Effective 2026
Positive
Feb 19, 2025
Prologis announced a leadership transition with CEO Hamid R. Moghadam set to retire effective January 1, 2026, while continuing as Executive Chairman. Daniel S. Letter, currently the company’s President, will succeed Moghadam as CEO and has been appointed to the Board of Directors, highlighting a carefully planned succession to ensure the company’s ongoing success and growth.
Business Operations and StrategyFinancial Disclosures
Prologis Reports Robust Q4 2024 Financial Growth
Positive
Jan 21, 2025
On January 21, 2025, Prologis, Inc. announced its financial results for the fourth quarter of 2024, highlighting significant growth in net earnings and revenues compared to the previous year. The company’s net earnings attributable to common stockholders increased to $1,277 million from $629 million in the fourth quarter of 2023. Prologis’s strategic capital revenues also saw a substantial rise, contributing to a total revenue of $2,201 million for the quarter. The announcement underscores Prologis’s robust position in the logistics real estate industry, with continued expansion and strong financial performance, benefiting its stakeholders.
DividendsBusiness Operations and StrategyFinancial Disclosures
Prologis Announces Strong Q4 2024 Financial Results
Positive
Jan 21, 2025
On January 21, 2025, Prologis, Inc. announced its financial results for the fourth quarter of 2024, revealing strong performance with total revenues of $8.2 billion for the year, up from $8.0 billion in 2023. The company’s net earnings attributable to common stockholders increased significantly to $3.7 billion from the previous year’s $3.1 billion, highlighting its effective strategies in its core real estate and strategic capital business lines. This financial growth positions Prologis strongly in the logistics real estate industry, benefiting its stakeholders through increased dividends and development gains.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.