In a report released today, Michael Rollins from Citi maintained a Buy rating on Digital Realty (DLR – Research Report), with a price target of $212.00.
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Michael Rollins has given his Buy rating due to a combination of factors that highlight Digital Realty’s positive operational trajectory. The company’s key performance indicators (KPIs) in the fourth quarter of 2024 were strong, indicating a favorable growth in same-store net operating income (SS NOI) projected at 3.5-4.5% for 2025. The retail segment, focused on smaller leasing deals, continues to gain momentum with prospects for further growth, while hyper-scale leasing is experiencing strengthened pricing and development yields.
Despite some challenges, such as the uneven quarterly performance in hyper-scale leasing, Rollins sees potential for Digital Realty to accelerate its core funds from operations per share (FFOPS) from mid-single digits in 2025 to higher single digits in the future. He notes that the demand for Gen-AI workloads is expected to benefit hyper-scale leasing in the near and medium term, and the eventual shift to greater inference demand should positively impact the retail-centric business. Rollins also mentions management’s strategic approach to leasing and the promising development pipeline, which is mostly pre-leased, as key factors supporting his optimistic outlook for the company.
In another report released today, JMP Securities also maintained a Buy rating on the stock with a $220.00 price target.
Based on the recent corporate insider activity of 21 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DLR in relation to earlier this year.