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5 Reasons to Add Prologis Stock to Your Portfolio Right Now
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Key Takeaways
Prologis is seeing healthy demand with high occupancy and rising leases supporting future rental income.
The company is expanding through acquisitions, development starts and a fast-growing data center platform.
Prologis' ample liquidity, low-cost debt and steady dividend growth reinforce its long-term appeal.
Including Prologis, Inc. (PLD - Free Report) in a portfolio appears attractive, supported by strong operating fundamentals and a favorable long-term outlook. Its industry-leading scale enhances operational efficiency, while a robust balance sheet supports ongoing expansion initiatives. Moreover, its strategic move into data centers positions the company to benefit from rising demand in this fast-growing asset class, strengthening its overall growth profile.
Moreover, the recent estimate revision trend indicates that analysts are bullish on this stock. Over the past two months, the Zacks Consensus Estimate for 2025 FFO per share has moved upward to $5.80. The same for 2026 has also been trending northward. The projections also suggest a 4.32% and 4.94% rise, respectively.
While shares of this Zacks Rank #2 (Buy) REIT have rallied 14.1% in the past three months, outperforming the industry's growth of 0.6%, there is still room for further appreciation.
Image Source: Zacks Investment Research
Factors That Make Prologis Stock a Solid Pick
Healthy Operating Performance: Prologis is a global industrial REIT focused on logistics and warehouse facilities that support supply chains, e-commerce and trade. Prologis owns and manages a vast portfolio of distribution centers in major consumption and transportation hubs worldwide. With a customer base spanning retailers, manufacturers and third-party logistics firms, Prologis provides modern, strategically located properties essential for efficient inventory management and last-mile delivery capabilities. The solid demand for Prologis’ strategically located facilities has driven healthy operating performance over the past several quarters.
In the third quarter of 2025, 65.6 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 77.2% in the quarter. The average occupancy level in Prologis’ owned and managed portfolio was 94.8% in the third quarter. For 2025, management has issued its guidance range for average occupancy in the band of 94.75-95.25%. We estimate occupancy to be 95.2%. The company’s new and renewal leases are expected to translate into considerable rises in future rental income. Our estimate points to a year-over-year increase of 9.1% in rental revenues in 2025. For 2026 and 2027, the metric is expected to witness growth of 6.8% and 9.9%, respectively.
Acquisitions & Development: Prologis continues to bolster its presence in high-barrier, high-growth markets through strategic acquisitions and development activities. From the beginning of the year through Sept. 30, 2025, the company’s share of acquisitions amounted to $1.19 billion. During the same period, the company’s consolidated development starts totaled $1.94 billion, of which 68% were build-to-suit projects. Prologis’ investments over the years comprise a wide array, including the largest M&A transactions in the real estate sector and individual off-market deals below $5 million.
For 2025, the company anticipates acquisitions at Prologis share between $1.25 and $1.50 billion. Development starts are expected in the range of $2.75-$3.25 billion.
Data Center Diversification: Prologis is positioning itself to tap into the rapidly expanding AI market by converting select properties in major population centers into high-performance data centers. To capitalize on this growing opportunity, Prologis is focusing on both warehouse conversions and ground-up developments. With 5.2 gigawatts of power either secured or in advanced stages, Prologis now represents one of the largest owners of utility-fed power suitable for data centers. For investors, the company’s fast-growing data center platform is adding a new layer of enthusiasm.
Balance Sheet & Cash Flow Strength: Prologis enjoys a healthy balance sheet position with ample flexibility. As of Sept. 30, 2025, this industrial REIT had a total available liquidity of $7.5 billion. PLD maintained an in-place cost of debt of just 3.2% with more than eight years of average remaining maturity. Debt to adjusted EBITDA was 5.0X. In addition, the company’s credit ratings, as of Sept. 30, 2025, were A2 (Outlook Positive) from Moody’s and A (Outlook Stable) from Standard & Poor’s, enabling the company to borrow at an advantageous rate.
Prologis’ current cash flow growth is projected at 14.80% compared with the 2.82% growth projected for the industry. Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 5.55% compares favorably with the industry’s 2.71%, reflecting that PLD is more efficient in using shareholders’ funds than its peers.
Given its balance sheet strength and prudent financial management, the company is well-poised to capitalize on growth opportunities.
Dividend: Solid dividend payouts are arguably the biggest enticements for REIT shareholders and Prologis remains committed to that. In the last five years, Prologis has increased its dividend five times, and its five-year annualized dividend growth rate is 12.66%. Given the company’s solid operating platform, opportunities for growth and a decent financial position compared with the industry, this dividend rate is expected to be sustainable over the near term. Check Prologis’ dividend history here.
The Zacks Consensus Estimate for Rexford Industrial’s 2025 FFO per share is pegged at $2.40, suggesting a 2.6% year-over-year increase.
The Zacks Consensus Estimate for W.P. Carey’s 2025 FFO per share is pegged at $4.92, calling for a year-over-year rise of 4.7%.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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5 Reasons to Add Prologis Stock to Your Portfolio Right Now
Key Takeaways
Including Prologis, Inc. (PLD - Free Report) in a portfolio appears attractive, supported by strong operating fundamentals and a favorable long-term outlook. Its industry-leading scale enhances operational efficiency, while a robust balance sheet supports ongoing expansion initiatives. Moreover, its strategic move into data centers positions the company to benefit from rising demand in this fast-growing asset class, strengthening its overall growth profile.
Moreover, the recent estimate revision trend indicates that analysts are bullish on this stock. Over the past two months, the Zacks Consensus Estimate for 2025 FFO per share has moved upward to $5.80. The same for 2026 has also been trending northward. The projections also suggest a 4.32% and 4.94% rise, respectively.
While shares of this Zacks Rank #2 (Buy) REIT have rallied 14.1% in the past three months, outperforming the industry's growth of 0.6%, there is still room for further appreciation.
Image Source: Zacks Investment Research
Factors That Make Prologis Stock a Solid Pick
Healthy Operating Performance: Prologis is a global industrial REIT focused on logistics and warehouse facilities that support supply chains, e-commerce and trade. Prologis owns and manages a vast portfolio of distribution centers in major consumption and transportation hubs worldwide. With a customer base spanning retailers, manufacturers and third-party logistics firms, Prologis provides modern, strategically located properties essential for efficient inventory management and last-mile delivery capabilities. The solid demand for Prologis’ strategically located facilities has driven healthy operating performance over the past several quarters.
In the third quarter of 2025, 65.6 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 77.2% in the quarter. The average occupancy level in Prologis’ owned and managed portfolio was 94.8% in the third quarter. For 2025, management has issued its guidance range for average occupancy in the band of 94.75-95.25%. We estimate occupancy to be 95.2%. The company’s new and renewal leases are expected to translate into considerable rises in future rental income. Our estimate points to a year-over-year increase of 9.1% in rental revenues in 2025. For 2026 and 2027, the metric is expected to witness growth of 6.8% and 9.9%, respectively.
Acquisitions & Development: Prologis continues to bolster its presence in high-barrier, high-growth markets through strategic acquisitions and development activities. From the beginning of the year through Sept. 30, 2025, the company’s share of acquisitions amounted to $1.19 billion. During the same period, the company’s consolidated development starts totaled $1.94 billion, of which 68% were build-to-suit projects. Prologis’ investments over the years comprise a wide array, including the largest M&A transactions in the real estate sector and individual off-market deals below $5 million.
For 2025, the company anticipates acquisitions at Prologis share between $1.25 and $1.50 billion. Development starts are expected in the range of $2.75-$3.25 billion.
Data Center Diversification: Prologis is positioning itself to tap into the rapidly expanding AI market by converting select properties in major population centers into high-performance data centers. To capitalize on this growing opportunity, Prologis is focusing on both warehouse conversions and ground-up developments. With 5.2 gigawatts of power either secured or in advanced stages, Prologis now represents one of the largest owners of utility-fed power suitable for data centers. For investors, the company’s fast-growing data center platform is adding a new layer of enthusiasm.
Balance Sheet & Cash Flow Strength: Prologis enjoys a healthy balance sheet position with ample flexibility. As of Sept. 30, 2025, this industrial REIT had a total available liquidity of $7.5 billion. PLD maintained an in-place cost of debt of just 3.2% with more than eight years of average remaining maturity. Debt to adjusted EBITDA was 5.0X. In addition, the company’s credit ratings, as of Sept. 30, 2025, were A2 (Outlook Positive) from Moody’s and A (Outlook Stable) from Standard & Poor’s, enabling the company to borrow at an advantageous rate.
Prologis’ current cash flow growth is projected at 14.80% compared with the 2.82% growth projected for the industry. Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 5.55% compares favorably with the industry’s 2.71%, reflecting that PLD is more efficient in using shareholders’ funds than its peers.
Given its balance sheet strength and prudent financial management, the company is well-poised to capitalize on growth opportunities.
Dividend: Solid dividend payouts are arguably the biggest enticements for REIT shareholders and Prologis remains committed to that. In the last five years, Prologis has increased its dividend five times, and its five-year annualized dividend growth rate is 12.66%. Given the company’s solid operating platform, opportunities for growth and a decent financial position compared with the industry, this dividend rate is expected to be sustainable over the near term. Check Prologis’ dividend history here.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are Rexford Industrial Realty, Inc. (REXR - Free Report) and W.P. Carey (WPC - Free Report) . Rexford Industrial and W.P. Carey each carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Rexford Industrial’s 2025 FFO per share is pegged at $2.40, suggesting a 2.6% year-over-year increase.
The Zacks Consensus Estimate for W.P. Carey’s 2025 FFO per share is pegged at $4.92, calling for a year-over-year rise of 4.7%.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.