Austin, Texas-based Digital Realty Trust, Inc. (DLR) brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. With a market cap of $60.4 billion, Digital Realty engages in the ownership, acquisition, repositioning, and management of technology-related real estate.
The real estate giant has outperformed the border market over the past year. Over the past 52 weeks, DLR stock has surged 41.7%, surpassing the S&P 500 Index’s ($SPX) 36.8% gains. On a YTD basis, DLR is up 35.2% outpacing the SPX’s 25.7% returns during the same time frame.
Zooming in further, DLR has also outpaced the iShares U.S. Digital Infrastructure and Real Estate ETF’s (IDGT) 23.8% gains on a YTD basis and 40.6% returns over the past 52 weeks.
Digital Realty’s stock prices surged over 9.6% following its impressive Q3 earnings release on Oct. 24. The company reported $520 million in new leasing, marking record activity in the greater-than-a-megawatt and 0-1 MW plus interconnection segments. Total operating revenue grew 2.1% year-over-year to $1.4 billion, driven by a 7.8% increase in rental revenues to $956.4 million, which exceeded analyst projections. Core funds from operations per share rose 3.1% from the prior year to $1.67, aligning with expectations, while an increased 2024 FFO outlook boosted investor confidence further.
For the current fiscal 2024, ending in December, analysts expect DLR’s core FFO per share to grow 1.8% year-over-year to $6.71. Its earnings surprise history is mixed. It has surpassed or matched analysts’ FFO estimates in three of the past four quarters while missing on another occasion.
DLR stock has a consensus “Moderate Buy” rating overall. Among the 25 analysts covering the stock, 14 recommend “Strong Buy,” one advises “Moderate Buy,” nine suggest “Hold,” and one advocates a “Strong Sell” rating.
On Oct. 28, RBC Capital analyst Jonathan Atkin maintained an “Outperform” rating on DLR while raising the price target to $207.
As of writing, DLR is trading above its mean price target of $173.04. The Street-high target of $212 suggests a potential upside of 16.5% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
