Digital Realty (DLR – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Michael Elias from TD Cowen reiterated a Hold rating on the stock and has a $129.00 price target.
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Michael Elias has given his Hold rating due to a combination of factors related to Digital Realty’s recent performance and future outlook. The company reported mixed results for the fourth quarter of 2024 and provided guidance for 2025 that showed both positive and negative aspects. While the company delivered on its promise of Core FFO/share growth for 2025, the potential for price increases in the data center market seems limited, which could impact future profitability.
In addition, while there is a possibility for a record leasing quarter in 2025, this is not guaranteed, and the company’s premium valuation remains a concern. The potential for accelerating growth in 2026 is present, but it is tempered by management’s plans to potentially increase development spending or monetize assets, which could affect returns. Given these mixed signals, Elias believes that a Hold rating is appropriate, reflecting cautious optimism but also acknowledging the risks and uncertainties ahead.