Prologis, Inc. (NYSE:PLD) reported third-quarter results that exceeded analyst expectations, reflecting solid operational performance and renewed confidence in its outlook.
The company raised its full-year guidance following stronger-than-expected results and reaffirmed its growth trajectory after previously pausing its forecast amid tariff uncertainties.
Record Leasing Activity Drives BTIG’s Bullish View
BTIG viewed the quarter favorably, highlighting that record leasing activity of 62.4 million square feet increased occupancy by 20 basis points to 95.3%. Build-to-suit developments accounted for 63.9% of new projects.
Also Read: Prologis Set To Benefit From Shrinking Warehouse Supply And Pent-Up Demand: Analyst
BTIG analysts led by Thomas Catherwood continue to rate Prologis at Buy with a $134 price forecast.
The brokerage said management anticipates nearly $1.7 billion of fourth-quarter dispositions and contributions, around eight times the cumulative value achieved during the first three quarters.
The company’s quarterly net operating income exceeded BTIG’s estimate by 1 cent per share, driven by stronger revenue, which the firm considered a high-quality outperformance.
Other positive deviations included 1 cent in lower general and administrative expenses and a net benefit of 3 cents from foreign exchange and tax effects.
The analysts noted that the company raised its 2025 core FFO guidance to $5.78-$5.81 per share, representing a 2-cent increase at the midpoint.
Key operating assumptions include an unchanged 95% average occupancy level, alongside increases of 50 basis points in both GAAP and cash same-store net operating income growth, reaching 4.5% and 5.0%, respectively.
BTIG’s $134 price forecast for Prologis implies an estimated total return of 16.1% and a forward valuation multiple of 21.6 times. The brokerage values Prologis shares at 18.6 times its 2026 projected price-to-FFO ratio and a discount of 10.8% to estimated net asset value.
BTIG analysts forecast FFO per share of $5.78 for 2025 and $6.20 for 2026, corresponding to price-to-FFO multiples of 20.0 times and 18.6 times, respectively. The brokerage anticipates same-store net operating income growth of 3.9% in 2025 and 5.2% in 2026.
Bank of America Reiterates Bullish Stance
In a separate research note, Bank of America analyst Samir Khanal reiterated Buy ratings on Prologis with $130 price forecast, citing improving market conditions and the company’s differentiated platform.
The analysts stated that the company’s stock gained 6% after reporting better-than-expected third-quarter results and an increase in its annual forecast.
The key positive from Prologis’ third-quarter results was management’s comment that “demand has clearly turned a corner” and the market is at an “inflection point.”
This aligns with the bank’s upgrade issued a month ago, following the BofA Global Real Estate Conference, where Prologis highlighted improving corporate decision-making.
Prologis said that the U.S. market vacancy currently stands at 7.5%. The company expects vacancy rates to “hang around this level for a couple of quarters before improving later in 2026.”
While net absorption is likely to strengthen alongside a modest increase in new leasing activity, it may remain below historical averages in the near term.
However, supply continues to decline meaningfully, with development starts down 75% from peak levels and 25% below pre-COVID levels. The bank continues to model Prologis’ occupancy to bottom out in the first half of 2026 and begin recovering in the second half of the year.
The bank’s proprietary 12-month forward-looking Warehouse Demand Indicator (WDI) appears to have bottomed in mid-2025. While conditions may remain uneven over the next few quarters, the WDI signals improving demand in the second half of 2026.
The bank estimates adjusted FFO per share at $4.45 for 2025, down slightly from $4.64 in 2024. However, adjusted FFO is expected to rebound to $4.97 in 2026 and further to $5.32 in 2027.
Price Action: PLD shares were trading lower by 0.48% to $122.18 at last check Thursday.
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