DigitalBridge Group: Truist Securities maintains Buy, raises PT to $16 from $15.

DigitalBridge Group: Truist Securities maintains Buy, raises PT to $16 from $15.

DigitalBridge Group, Inc. (NYSE: DBRG), a prominent player in the digital infrastructure investment landscape, has received a boost from Truist Securities. The investment research firm has maintained its Buy rating on the stock while raising its price target (PT) to $16 from $15 [1].

The decision by Truist Securities reflects a positive outlook on the company's strategic pivot from managing non-digital assets to focusing exclusively on digital infrastructure. DigitalBridge Group's transformation has positioned it as a large-scale, multi-strategy asset manager in this rapidly evolving sector. The company's recent financial performance, including strong fourth quarter results for 2024, has bolstered confidence in its strategic direction and operational execution [1].

DigitalBridge Group's fourth quarter results exceeded both analyst and market expectations, demonstrating the company's ability to outperform in challenging conditions. The company's focus on digital assets has been timely, given the increasing importance of digital infrastructure in the modern economy. Truist Securities' analyst team believes that the company's recent performance and strategic focus indicate potential for future growth and improved market valuation [1].

One of the key factors driving this positive outlook is DigitalBridge Group's ambitious capital raising targets. The company aims to raise between $5.0 billion and $6.0 billion of fee-generating capital annually. This capital raising effort is designed to fuel growth while maintaining a balanced portfolio structure. The company has made significant progress in expanding its assets under management (AUM), with its total AUM standing at $96.0 billion, and fee-earning AUM (FEEUM) representing 37.0% of this total [1].

Despite its strategic improvements and strong recent results, DigitalBridge Group's stock has been one of the worst-performing in its sector over the past five years. However, Truist Securities believes that as the company continues to simplify its business model and achieve its long-term objectives, its stock performance could improve significantly. The company's valuation currently appears attractive compared to its peers, trading at approximately 17 times its estimated 2026 Fee-Related Earnings (FRE), which is substantially below the peer average of about 27 times [1].

Truist Securities' analysts also note that DigitalBridge Group's focus on digital infrastructure positions it well to capitalize on long-term trends such as 5G deployment, cloud computing growth, and increasing data consumption. These trends are expected to drive demand for digital infrastructure, potentially leading to appreciation in the company's existing assets and opportunities for new investments [1].

Looking ahead, asset monetization is expected to play a key role in DigitalBridge Group's performance in 2025. The company anticipates potential sales of assets that could result in significant gains and reduce volatility in carried interest metrics. These monetization events could serve as catalysts for stock price appreciation and demonstrate the value creation within DigitalBridge's portfolio [1].

In conclusion, Truist Securities' decision to maintain a Buy rating and raise its price target to $16 reflects a positive outlook on DigitalBridge Group's strategic pivot and recent financial performance. The company's focus on digital infrastructure, ambitious capital raising targets, and strong fourth quarter results suggest potential for future growth and improved market valuation.

References:
[1] https://www.investing.com/news/swot-analysis/digitalbridges-swot-analysis-digital-infrastructure-firms-stock-poised-for-growth-93CH-4190653