Is Prologis' 9.1% Three-Month Stock Rally Built to Last?

Prologis PLD shares have risen 9.1% over the past three months, outpacing the industry, which fell 2.9%, signaling a notable turnaround from earlier volatility this year. 

Investor confidence has been boosted by stabilizing industrial fundamentals, stronger leasing activity and positive commentary from the company’s third-quarter results. The stock’s rebound reflects both solid execution and a healthier demand backdrop across logistics real estate. 

Prologis’ scale provides operational efficiency, while a strong balance sheet underpins continued expansion. Additionally, its strategic entry into data centers positions the firm to capture growth in this rapidly expanding segment, enhancing its long-term growth prospects.

Factors Behind PLD’s Stock Price Rise

The stock’s recent momentum is largely supported by Prologis’ strong third-quarter results. The company delivered record leasing activity of nearly 62 million square feet, highlighting improved customer decision-making and accelerating leasing velocity. Portfolio occupancy rose to 95.3%, while net effective rent change stayed exceptionally strong at 49%, signaling the durability of its long lease mark-to-market embedded in the portfolio. Lease mark-to-market stood at 19% at the end of September, setting the stage for solid rent growth as contracts reset in the coming years. 

Demand conditions are improving, with management citing more optimistic customer sentiment and early signs of a broad-based recovery across regions. U.S. industrial net absorption reached about 47 million square feet, and vacancy has stabilized near 7.5%, suggesting a cyclical turning point for rents and occupancy.

Prologis’ expanding data center platform is fueling investor interest. 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. Strong demand is evident, as every megawatt over the next three years is already in customer discussions. Management is also evaluating new capitalization strategies to accelerate value creation. 

As of Sept. 30, 2025, Prologis held $7.5 billion in liquidity with debt costing just 3.2% and more than eight years’ average remaining maturity, giving it the flexibility to invest through cycles and pursue build-to-suit projects and strategic growth initiatives.

Will This Trend Continue for PLD?

Supported by stabilizing supply, stronger demand and multiyear rent growth, Prologis’ stock has solid fundamental backing. The industrial REIT appears to be entering a constructive earnings phase. While broader macro conditions may influence near-term momentum, the underlying business fundamentals point to a positive medium-term outlook.

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.

Despite the rally in the past three months, PLD shares have room for further appreciation, and including Prologis in a portfolio appears attractive, supported by strong operating fundamentals and a favorable long-term outlook. Also, 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%. Check Prologis’ dividend history here.

Currently, PLD has a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Digital Realty Trust DLR and Terreno Realty TRNO. Both Digital Realty and Terreno Realty carry a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Digital Realty’s 2025 FFO per share is pegged at $7.35, which indicates year-over-year growth of 9.5%.

The Zacks Consensus Estimate for Terreno Realty’s full-year FFO per share stands at $2.80, which calls for an increase of 15.70% from the year-ago period. 

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research