Prologis' (PLD) Rating Upgraded: Time To Buy The Stock?

Ushering in good news for the shareholders of Prologis Inc. (NYSE:PLD) , S&P Global Ratings raised the company’s rating to A- from BBB+. The rating outlook is stable, per news published by MarketWatch.com.

The upgrade is backed by this industrial REIT’s strong performance. The company has a diversified real estate portfolio and has scope for rent growth, which is encouraging. Moreover, the rating agency acknowledged the company’s efficient financial policies that have helped in reduction in debt.

Notably, the rating upgrade enhances its creditworthiness in the market and is likely to boost investors’ confidence in the stock. In fact, such moves provide companies an opportunity to enjoy reduced costs on debts and better access to capital.

Also, over the past six months, shares of Prologis returned around 3.4% against the 5.7% decline witnessed by the Zacks categorized REIT Equity Trust – Other industry.



Amid a consistent shift toward e-commerce and supply chain strategy transformations, Prologis is well poised to benefit from its capacity to offer modern distribution facilities in strategic infill locations. In fact, the company’s occupancy and leasing volumes remained high in third-quarter 2016. It witnessed broad-based demand across customer segments, driven by e-commerce, automotive, consumer products and construction supplies. In addition, Prologis remains focused on bolstering its liquidity.

However, rising number of new facilities, competitive landscape and any further hike in interest rates remain concerns for the company. Moreover, over the past seven days, estimates for full-year 2016 and 2017 remained unchanged at $2.57 and 2.65, respectively.

Prologis currently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry can consider stocks like DCT Industrial Trust Inc. (NYSE:DCT) , Mack-Cali Realty Corp. (NYSE:CLI) and Seritage Growth Properties (NYSE:SRG) . Each of these stocks has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DCT Industrial delivered an average positive surprise of 5.18% over the trailing four quarters.

Mack-Cali has long-term expected growth rate of 6.6% against the industry average of 5.8%.

Seritage’s estimates for 2016 inched up 0.9% over the past 30 days to $2.34.

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