Prologis PLD is slated to report its second-quarter 2026 results on July 16, 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 posted core funds from operations (FFO) per share of $1.50, up 5.6% from a year ago. The figure beat the Zacks Consensus Estimate by 1.49%. Results were supported by robust leasing activity.
Over the trailing four quarters, Prologis beat the Zacks Consensus Estimate for FFO per share on three occasions and met in the remaining period, with the average beat being 2.09%. This is depicted in the graph below:
Prologis, Inc. Price and EPS Surprise
Prologis, Inc. price-eps-surprise | Prologis, Inc. Quote
US Industrial Real Estate Market in Q2
The U.S. industrial real estate market strengthened further in the second quarter of 2026. According to a Cushman & Wakefield report, national vacancy declined to 6.9%, suggesting the market has moved beyond its cyclical peak. Net absorption increased 21% from the prior quarter to 62.1 million square feet, bringing first-half demand to 113.6 million square feet — the strongest first-half performance since 2023.
Occupiers continue to favor buildings with higher clear heights, stronger power capacity and infrastructure suited for automation and AI systems. Dallas–Fort Worth, Phoenix, Atlanta and several Midwest logistics hubs performed well, while port markets, including Houston, New Jersey, Los Angeles and Savannah, GA, also posted healthy demand.
Leasing activity accelerated despite longer transaction timelines. Year-to-date leasing reached a four-year high, up 16% from a year earlier, with Dallas–Fort Worth, the Inland Empire and Chicago leading the country. Third-party logistics companies and manufacturers accounted for more than 55% of leasing volume as businesses expanded and adjusted their supply chains.
Supply remained relatively controlled. Second-quarter deliveries totaled 62 million square feet, down 16% year over year, while first-half completions were 19.2% below the same period in 2025. At the same time, the construction pipeline increased to 305.1 million square feet, up 18% from a year earlier. More than one-third of the pipeline is build-to-suit, reducing the risk of excessive speculative supply. Asking rents rose to $10.32 per square foot, up 2.9% year over year and an improvement from the first quarter’s growth rate.
Factors at Play and Projections for PLD’s Q2 Results
Prologis’ earnings should benefit from strong leasing, high occupancy and continued rent roll-up as older leases reset at higher rates. Positive cash rent growth, solid retention and management’s increased same-store NOI outlook support further growth in recurring rental income.
Earnings could also be aided by profitable development, build-to-suit projects, strategic capital fees and joint ventures that expand investment capacity with less balance sheet pressure. Growth in data centers, solar and energy infrastructure provides additional development income and longer-term earnings diversification.
The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $2.14 billion, which indicates a 5.71% year-over-year increase.
Prologis’ activities during the to-be-reported quarter were not adequate for gaining analysts’ confidence. The Zacks Consensus Estimate for second-quarter FFO per share has been revised southward over the past month, and it currently stands at $1.53. However, it implies a 4.79% increase year over year.
What Our Quantitative Model Predicts for PLD
Our proven model predicts 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 the case here.
Prologis currently has an Earnings ESP of +1.47% and carries a Zacks Rank of 2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector, SL Green Realty SLG and Cousins Properties CUZ, you may want to consider, as our model shows that these also have the right combination of elements to report an FFO beat this quarter.
SL Green is slated to report quarterly numbers on July 22. SLG has an Earnings ESP of +7.20% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cousins is slated to report quarterly numbers on July 30. CUZ has an Earnings ESP of +0.45% and carries 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.
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Prologis, Inc. (PLD): Free Stock Analysis Report
Cousins Properties Incorporated (CUZ): Free Stock Analysis Report
SL Green Realty Corporation (SLG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).