Can Prologis Sustain Its Growth Momentum in Q3 Amid Market Pressures?

Prologis PLD is slated to report its third-quarter 2025 results on Oct. 15, before the opening bell. In anticipation of the announcement, industry analysts and investors are eager to assess the company's performance and prospects in the current economic climate.In the last reported quarter, this leading industrial REIT reported a surprise of 3.55% in terms of core funds from operations (FFO) per share. The quarterly results reflected a rise in rental revenues and healthy leasing activity. However, high interest expenses were an undermining factor.Over the trailing four quarters, Prologis beat the Zacks Consensus Estimate in terms of FFO per share on all occasions, with the average beat being 4.88%. This is depicted in the graph below:Prologis, Inc. Price and EPS Surprise Prologis, Inc. price-eps-surprise | Prologis, Inc. QuoteFactors to Note Ahead of PLD’s Q3 Earnings ReleasePrologis continues to benefit from its strategic portfolio location in some of the world’s busiest distribution markets. Its emphasis on targeted acquisitions and built-to-suit developments is expected to support its third-quarter results and position it to benefit from emerging opportunities despite broader market challenges.Prologis’ scale and cost advantages are likely to have played a key role in supporting its growth strategy. Backed by a resilient balance sheet and efficient capital access, Prologis remains financially well-positioned. During the review period, the company is likely to have demonstrated strong liquidity and stability, reinforcing its leadership position.However, high interest expenses are a concern for Prologis. We expect interest expenses to have remained elevated during the third quarter. Moreover, the excess supply led to higher competition, pressurizing occupancy.Projections for PLDThe Zacks Consensus Estimate for third-quarter revenues is currently pegged at $2.09 billion, which indicates a 10% year-over-year increase.Our estimate for average occupancy is 94.8%, which implies a 60 bps decrease from the prior quarter. The same-store net operating income is expected to rise 2.2% year over year. We expect interest expenses to be up 6.4% year over year in the third quarter.Prologis’ activities during the to-be-reported quarter were somewhat adequate for gaining analysts’ confidence. The Zacks Consensus Estimate for third-quarter FFO per share has been revised a cent upward to $1.44 in the past two months. It implies a 0.7% increase year over year.What Our Quantitative Model Predicts for PLDOur proven model does not conclusively predict a surprise in terms of FFO per share for Prologis this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.Prologis currently carries a Zacks Rank of 2 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks That Warrant a LookHere are two stocks from the broader REIT sector, Extra Space Storage Inc. EXR and Vornado Realty Trust VNO, you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.Extra Space Storage is slated to report quarterly numbers on Oct. 29. EXR has an Earnings ESP of +0.28% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Vornado Realty Trust is slated to report quarterly numbers on Nov. 3. VNO has an Earnings ESP of +2.90% and a Zacks Rank of 3 at present.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.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Prologis, Inc. (PLD): Free Stock Analysis Report Vornado Realty Trust (VNO): Free Stock Analysis Report Extra Space Storage Inc (EXR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks