Goldman Sachs Initiates Buy Recommendation on Digital Realty TrustGoldman Sachs Initiates Buy Recommendation on Digital Realty Trust Goldman Sachs analyst James Schneider has initiated coverage on Digital Realty Trust, Inc. (DLR) with a buy recommendation and a price target of €175. Robust Demand and Favorable Supply Conditions Schneider cites robust secular demand trends driven by artificial intelligence (AI) and hyperscaler demand. Additionally, favorable cyclical supply conditions due to utility and construction capacity constraints are expected to benefit the company. Improved Capital Position Despite previous debt concerns, the analyst believes Digital Realty’s capital position has improved after a joint venture with Blackstone Inc. (BX). This, combined with the company’s strong operating fundamentals, provides a solid foundation for the next two years. Expectations for Beating Estimates Schneider predicts Digital Realty will exceed key Street estimates, including new leases and lease renewal prices. The outsourced data center market has tightened due to high demand from hyperscalers and AI-driven computing, leading to strong pricing momentum. Analysts’ Optimism Other analysts have also upgraded their ratings on DLR recently. JPMorgan raised the stock to overweight and increased the price target to $175. BMO Capital upgraded the rating to Outperform and set a price target of $170. ETF Exposure Investors can gain exposure to DLR shares through ETFs such as Pacer Data & Infrastructure Real Estate ETF (SRVR) and iShares US Digital Infrastructure and Real Estate ETF (IDGT). Price Movement At the time of writing, DLR shares were up 0.03% at $152.09. Disclaimer This article was partially generated using AI tools and reviewed and published by Benzinga’s editorial staff.
Goldman Sachs analyst James Schneider initiated reporting on Digital Realty Trust, Inc. DLR with a buy recommendation and a price target of €175.
The analyst says he sees robust secular demand trends driven by AI and hyperscaler demand, alongside favorable cyclical supply conditions due to utility and construction capacity constraints.
Although the company was heavily burdened with debt for much of 2023, the analyst believes its capital position has improved following the Blackstone Inc. BX joint venture has put her in a good position for the next two years.
Schneider expects Digital Realty to beat key Street estimates on several fronts, including new leases and lease renewal prices in the coming quarters.
The analyst writes that the outsourced data center market has tightened significantly over the past year due to strong demand from hyperscalers and a surge in AI-driven computing needs. He expects pricing momentum to remain high despite some moderation.
Last week, JPMorgan raised the stock to overweight from neutral and raised the price target to $175 from $150.
Also, BMO Capital upgraded the rating to Outperform (from Market Perform) and raised the price target to $170 (from $144).
DLR shares are up more than 32% in the past year. Investors can gain exposure to the shares through Pacer Data & Infrastructure Real Estate ETF SRVR And IShares US Digital Infrastructure and Real Estate ETF IDGT.
Price promotion: DLR shares were up 0.03% at $152.09 at last check on Monday.
Disclaimer: This content was produced in part using AI tools and was reviewed and published by Benzinga’s editorial staff.
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