UPDATE: Deutsche Bank Upgrades Prologis to Buy, Raises PT on Positive Growth Outlook

In a report published Thursday, Deutsche Bank analyst Vin Chao upgraded the rating on

from Hold to Buy, and raised the price target from $43.00 to $46.00. In the report, Deutsche Bank noted, “We are upgrading Prologis to Buy from Hold based on our expectations of accelerating rent growth and the positive demand impacts of both lower oil prices on consumption and the stronger dollar boosting import volume. The company though up 18% YTD has lagged the broader REIT index by 10% on the back of slowing global growth concerns and rising supply. Though expected U.S. completions in 2014-2016 appear to be trending back towards prior cycle peak levels, as a percent of inventory supply is only getting back to the average level since 1990 at ~1%. We think the supply issues are contained to a few select markets like Dallas, Houston, and Indianapolis with overall national supply moving back to historical levels following a period of very low supply over the past 5 years. And, with the vacancy rate now down below the prior cycle low, we think new supply should be absorbed relatively quickly.” Prologis closed on Wednesday at $42.68.