November 23, 2023
Top 10 Stock Prologis Strong Buy Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Prologis Strong Buy

360 METRICS	November 23, 2023
VALUE
VALUE	10
GROWTH
GROWTH	87
SAFETY
SAFETY	98
SENTIMENT
SENTIMENT	85
360° VIEW
360° VIEW	84

ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Prologis are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Prologis. The consolidated Growth Rank has a good rank of 87, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 87% of competitors in the same industry. The consolidated Safety Rank at 98 means that the company has a financing structure that is safer than 98% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 85, which means that professional investors are more optimistic about the stock than for 85% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 10, meaning that the share price of Prologis is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 90% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 84, Prologis is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 87), a safe financing structure (Safety Rank of 98), and positive professional market sentiment (Sentiment Rank of 85), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Prologis compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (87% better than peers). The value rank could be the reverse reflection of that (13%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Prologis very positive

SENTIMENT METRICS	November 23, 2023
ANALYST OPINION
ANALYST OPINION	92
OPINIONS CHANGE
OPINIONS CHANGE	59
PRO HOLDINGS
PRO HOLDINGS	40
MARKET PULSE
MARKET PULSE	95
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	85

ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Prologis is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Prologis. Analyst Opinions are at a rank of 92 (better than 92% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 59, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 95, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 95% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 40, which means that currently, professional investors hold less stock in this company than in 60% of alternative investment opportunities. Pros tend to invest in other companies. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Prologis has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Prologis may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Prologis. ...read more

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Value Strategy: Prologis Stock Price Value low

VALUE METRICS	November 23, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	3
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	10
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	42
DIVIDEND YIELD
DIVIDEND YIELD	30
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	10

ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Prologis shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Prologis. Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Prologis's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 42, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Prologis. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 10 and Dividend Yield, which is lower than 70% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on Prologis's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Prologis? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Prologis? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Prologis may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more

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Growth Strategy: Prologis Growth Momentum high

GROWTH METRICS	November 23, 2023
REVENUE GROWTH
REVENUE GROWTH	78
PROFIT GROWTH
PROFIT GROWTH	41
CAPITAL GROWTH
CAPITAL GROWTH	100
STOCK RETURNS
STOCK RETURNS	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	87

ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% compared with alternatives) for 2022, Prologis shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Prologis. Sales Growth has a rank of 78 which means that currently, professionals expect the company to grow more than 78% of its competitors. Capital Growth is also above 41% of competitors with a rank of 100. But Profit Growth only has a rank of 41, which means that currently professionals expect the company to grow its profits less than 59% of its competitors. And Stock Returns have also been below average with a rank of only 47. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more

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Safety Strategy: Prologis Debt Financing Safety very solid

SAFETY METRICS	November 23, 2023
LEVERAGE
LEVERAGE	74
REFINANCING
REFINANCING	10
LIQUIDITY
LIQUIDITY	82
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98

ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2022, the company Prologis has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Prologis is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Prologis. Leverage is at a rank of 74, meaning the company has a below-average debt-to-equity ratio. It has less debt than 74% of its competitors. Liquidity is also good at a rank of 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 10, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 90% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Prologis has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Prologis. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more

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Combined financial peformance: Prologis Above-Average Financial Performance

COMBINED PERFORMANCE	November 23, 2023
VALUE
VALUE	10
GROWTH
GROWTH	87
SAFETY
SAFETY	82
COMBINED
COMBINED	73

ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Prologis (REITs: Industrials, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Prologis are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives). But they show above-average growth (Growth Rank of 87) and are safely financed (Safety Rank of 98, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on Prologis's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Prologis exhibits low value (Obermatt Value Rank of 10), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 87). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 98) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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