Why Is Prologis (PLD) Up 9.8% Since Last Earnings Report?

A month has gone by since the last earnings report for Prologis (PLD). Shares have added about 9.8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Prologis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Prologis Q4 FFO Meets Estimates, Rental Revenues Rise Y/Y

Prologis reported fourth-quarter 2025 core FFO per share of $1.44, meeting the Zacks Consensus Estimate. However, this compared unfavorably with the year-ago quarter’s figure of $1.50.

Results reflected a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor.

Prologis generated rental revenues of $2.09 billion, missing the Zacks Consensus Estimate of $2.17 billion. However, the figure increased from the $1.94 billion reported in the year-ago period. Total revenues were $2.25 billion, up from the year-ago quarter’s $2.2 billion.

Quarter in Detail

In the fourth quarter, 43.8 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 77.7% in the quarter.

The average occupancy level in Prologis’ owned and managed portfolio was 95.3% in the fourth quarter, up from the prior quarter’s 94.8% but down from the year-ago period’s 95.6%.

Prologis’ share of net effective rent change was 43.8% in the October-December quarter. In the reported quarter, the cash rent change was 27.3%. Cash same-store net operating income (NOI) grew 5.7% compared to 5.2% in the previous quarter.

The company’s share of building acquisitions amounted to $516.8 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.2% in the fourth quarter. Development stabilization aggregated $539 million, with 37.5% being built to suit, while development starts totaled $1.02 billion, with 47.9% being built to suit. Prologis’ total dispositions and contributions were $1.89 billion, with a weighted average stabilized cap rate (excluding land and other real estate) of 5%.

However, during the reported quarter, interest expenses jumped 12.2% on a year-over-year basis to $260.5 million.

Liquidity

Prologis exited the fourth quarter of 2025 with cash and cash equivalents of $1.15 billion, down from $1.19 billion at the end of the third quarter of 2025. Total liquidity amounted to $7.6 billion at the end of the quarter.

Debt, as a percentage of the total market capitalization, was 24.6% as of Dec. 31, 2025. The company's weighted average interest rate on its share of the total debt was 3.3%, with a weighted average term of 8.2 years.

Prologis and its co-investment ventures issued an aggregate of $3 billion of debt in the reported quarter at a weighted average interest rate of 3.1% and a weighted average term of 7.2 years.

2026 Guidance

Prologis provided its 2026 core FFO per share guidance in the range of $6.00-$6.20. The company expects average occupancy to be between 94.75% and 95.75%. Cash same-store NOI (Prologis share) is projected in the range of 5.75-6.75%.

The company has issued its outlook for capital deployment (Prologis share) on development starts of $3.00-$4.00 billion. Spending on acquisitions is projected to be $1.00 billion-$1.50 billion. Dispositions are estimated at $1.75-$2.25 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

VGM Scores

Currently, Prologis has a poor Growth Score of F, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Prologis has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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

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