On Monday, RBC Capital Markets updated their outlook on Digital Realty Trust (NYSE:DLR) shares, a leading global provider of data center, colocation, and interconnection solutions. Analysts at the firm increased the price target on the company's shares to $207.00 from the previous $177.00, while retaining an Outperform rating.
The adjustment followed the company's recent financial performance, which surpassed consensus expectations. Digital Realty Trust reported a record new leasing figure of $521 million, with deal composition in line with prior expectations and higher pricing, including escalators of 4% or more. The company's backlog also reached a new high at $859 million.
Renewal rates showed significant growth, with a 15% increase on a GAAP basis and a 28% rise on a cash basis. Digital Realty Trust's management has also released updated guidance for 2024, with projected midpoints for revenues at $5.58 billion, EBITDA at $2.95 billion, capital expenditures at $2.30 billion, and core FFO per share at $6.70.
The analyst expressed confidence that the company's record backlog and advantageous lease escalators place it in a strong position for accelerated revenue and earnings growth in FY25 and FY26. This optimistic outlook underpins the decision to raise the price target to $207.00.
InvestingPro Insights
Digital Realty Trust's recent performance and RBC Capital Markets' optimistic outlook are further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $59.98 billion, reflecting its significant position in the Specialized REITs industry.
InvestingPro Tips highlight that Digital Realty Trust has maintained dividend payments for 21 consecutive years, underscoring its commitment to shareholder returns. This aligns well with the company's strong financial performance and record-breaking leasing figures mentioned in the article.
Moreover, the company's revenue for the last twelve months as of Q2 2024 was $5.35 billion, with a revenue growth of 4.76% over the same period. This data supports the analyst's confidence in Digital Realty Trust's potential for accelerated revenue growth in the coming years.
It's worth noting that InvestingPro offers 16 additional tips for Digital Realty Trust, providing investors with a comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable given the company's recent strong performance and positive outlook.
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