Based in Austin, Texas, Digital Realty Trust, Inc. (DLR) operates in the real estate sector, focusing on data centers and technology-related properties. With a market cap of $45.9 billion, the company provides colocation, interconnection, and cloud services across North America, Europe, Asia, and Australia.
Companies valued at $10 billion or more are generally considered “large-cap” stocks and Digital Realty fits this criterion perfectly, exceeding the mark. Digital Realty is renowned for its expansive global network of over 300 carrier-neutral data centers and its leadership in renewable energy adoption across 50+ metropolitan areas in 25+ countries.
However, the REIT has dipped 4.7% from its 52-week high of $154.18 reached in March. Despite this decline, shares of DLR have gained 6.7% over the past three months, outpacing the broader S&P 500 Index's ($SPX) 4.6% gain during the same period.
Longer term, Digital Realty's shares have gained 41.1% over the past 52 weeks, outperforming SPX's 25.5% return in the same period. Yet, on a YTD basis, DLR’s 9.2% gain lags behind the SPX's 14.4% rise.
Since June last year, DLR has consistently traded above its 200-day moving average, signaling a bullish trend. Additionally, despite some fluctuations, DLR has mostly stayed above its 50-day moving average during this period, further reinforcing its upward momentum.
DLR has outperformed over the past year due to strong demand for high-performing data centers driven by digital transformation trends, a diversified tenant base, a robust development pipeline, and strategic capital deployment efforts bolstering its financial strength and growth prospects.
Plus, the stock soared 4.9% following its Q1 earnings result on May 2 due to the company's strong core funds from operations (FFO) performance, which surpassed Wall Street expectations. This was driven by record leasing activity fueled by significant deals and supported by strategic capital deployment through asset sales and joint ventures, enhancing investor confidence in its growth trajectory.
Furthermore, its rival American Tower Corporation (AMT) has underperformed both DLR and broader equity indices, with AMT shares showing a 5.3% increase over the past 52 weeks and a 9% decline on a YTD basis.
Despite the stock’s outperformance over the past year, analysts are cautiously optimistic about DLR’s prospects. The stock has a consensus rating of “Moderate Buy” from the 21 analysts in coverage, and it is currently trading slightly below the mean price target of $148.70.
On the date of publication, Sohini Mondal 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.
