Summary
This week’s stock analysis focuses on Prologis ($PLD), a Real Estate Invest Trust (REIT) that owns and controls over 4,715 buildings and almost 1 billion square feet in space. The company benefits from increased demand for storage at its facilities due to the rise of online shopping and e-commerce. With a strong competitive advantage and massive demand for more space, Prologis has performed well in 2021, driven by supply bottlenecks that are expected to take years to normalize. Wall Street analysts have an average price target of $159.22, with the stock trading at $161.
Company Overview
Prologis is a leading provider of logistics and distribution space, serving major companies such as Amazon and Home Depot. The company owns and controls prime real estate outside of major urban areas, presenting huge barriers to entry for competitors. With over 4,715 buildings and almost 1 billion square feet in space across four continents, Prologis has a unique portfolio of inventory storage, assembly, and logistics close to the largest metropolitan areas in the world.
Industry Trends
The COVID-19 pandemic has accelerated the shift towards e-commerce, leading to increased demand for storage at Prologis’ facilities. The company’s blue-chip clientele is concerned with supply chain breakdowns and bottlenecks, which bode well for PLD moving forward. Earnings for Prologis are expected to grow by 11.65% in the coming year, from $4.12 to $4.60 per share.
Technical Analysis
We will analyze several key indicators and metrics to determine whether to buy, sell, or stand aside on Prologis stock. These include:
- Wall Street Analysts’ Estimates: Based on 9 best-performing Wall Street analysts offering 12-month price targets for Prologis in the last 3 months.
- 52-Week High and Low Boundaries: Looking at the long-term chart of PLD provides us with the 52-week high and low boundaries.
- Vantagepoint A.I. Forecast (Predictive Blue Line): We will analyze the VantagePoint predictive blue line over the last year to determine the medium-term trend price forecast.
- Neural Network Indicator: We will examine the Neural Net indicator, which predicts future short-term strength and/or weakness in the market.
- Intermarket Analysis: We will look at statistical price correlations of assets to understand what is driving the price.
Trading Strategy
Our trading suggestion is based on several key indicators:
- Buy when the VantagePoint predictive blue line turns above the black line, indicating an UP opportunity.
- Sell when the Neural Net indicator is red, forecasting short-term weakness in the market.
- Use double confirmation with the A.I. forecast and Neural Net to find statistically sound trading opportunities.
Intermarket Analysis
Prologis has a strong narrative with solid earnings and great positioning around its leadership in the REIT logistics space. However, we need to understand what is driving the price through intermarket analysis, which looks at statistical price correlations of assets. With 31 key markets driving PLD’s price, it is essential to consider these factors when making trading decisions.
Conclusion
Prologis has a strong competitive advantage and massive demand for more space, making it an attractive investment opportunity. With earnings expected to grow by 11.65% in the coming year, and Wall Street analysts having an average price target of $159.22, we recommend following the A.I. trend analysis outlined in this stock study and practicing good money management on all trades. However, please remember that there is a high degree of risk involved in trading, and it is not prudent or advisable to make trading decisions that are beyond your financial means or involve trading capital that you are not willing and capable of losing.