Guggenheim Initiates Digital Realty with Neutral Rating and No Price Target

Guggenheim initiated coverage of Digital Realty with a Neutral rating and no price target, citing the company's leadership in the data center industry and expected benefits from industry growth and consolidation. However, the analyst believes the shares are fairly valued at current levels.

Guggenheim Securities has initiated coverage on Digital Realty Trust (NYSE: DLR) with a Neutral rating and no price target. The research firm, known for its analytical insights into the real estate investment trust (REIT) sector, has highlighted Digital Realty Trust's leadership in the data center industry and its expected benefits from industry growth and consolidation [1].

According to Guggenheim, Digital Realty Trust, with a market capitalization of $58.7 billion, is one of the two very large publicly traded data center operators. The company's position allows it to benefit from its scale in terms of access to capital and technology deployment. Guggenheim expects Digital Realty Trust to emerge as one of the leaders as industry consolidation continues in the data center sector [1].

Despite these positive factors, Guggenheim believes the stock is already fairly valued at approximately 20.4 times its 2026 EBITDA estimate. The firm also noted that Digital Realty Trust is trading at 24.4 times its 2026 AFFO (Adjusted Funds From Operations) estimate, supporting the neutral stance on the stock [1].

In other recent news, Digital Realty Trust announced the issuance of €850 million in notes due 2034 through its subsidiary, Digital Dutch Finco B.V. These notes carry an interest rate of 3.875% and are senior unsecured obligations, guaranteed by both Digital Realty Trust and its operating partnership. The company intends to use the net proceeds of approximately €836.6 million for various purposes, including repaying borrowings and acquiring additional properties [1].

Additionally, Mizuho has raised its price target for Digital Realty Trust to $191 from $177, maintaining an Outperform rating due to strong bookings and potential upside from the fund. At its Annual Meeting of Stockholders, Digital Realty Trust reported the election of directors and the ratification of KPMG LLP as its independent auditor. The meeting also saw approval of executive compensation and the Amended and Restated Employee Stock Purchase Plan. However, a stockholder proposal concerning the human right to water did not pass. These developments reflect ongoing strategic and financial activities within Digital Realty Trust [1].

References:
[1] https://www.investing.com/news/analyst-ratings/digital-realty-trust-stock-initiated-with-neutral-rating-by-guggenheim-93CH-4128991