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BofA Revises Industrial Rating to Marketweight

Banc of America Securities has revised its advice to rate all industrials as "marketweight."

By John McCloud | Updated on July 02, 2008

NEW YORK CITY-After previously rating global industrials “overweight” and US industrials “underweight,” Banc of America Securities LLC has revised its advice to rate all industrials as “marketweight.” But it simultaneously revised its recommendation for Denver-based ProLogis, the world’s largest industrial REIT, from buy to neutral.

In a June 19 report prepared by BofA analysts Mitchell Germain and Christy McElroy, the company worries the 35% increase in fuel costs since January could put downward pressure on long-term air and container cargo trends. With transportation expenditures comprising roughly 70% of supply chain costs, the two researchers say they see potential for a moderate shift in the global supply chain that would decrease demand for distribution space overseas, push rents down and reduce the need for new construction.

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