Data center REIT Digital Realty eyes best day in 17 years on upbeat outlook
DLR•Broker upgrades and peer strength follow the update
TD Cowen upgraded DLR to "buy" from "hold" and raised its price target to $222 from $192.
On the heels of strong year-to-date leasing, DLR management sees its record backlog supporting "multiple years of double-digit" core FFO per share growth, a notable change versus prior messaging, TD Cowen wrote in a note.
JPMorgan increased its price target to $235 from $230.
Shares of peers Equinix EQIX.O and Iron Mountain IRM.N were up 6% and 5%, respectively, on the session.
With the advance, DLR shares were up about 32% year to date and well outperforming the roughly 1.6% rise for the S&P 500 Real Estate index .SPLRCR.
Twenty-seven of 34 analysts rate the stock "strong buy" or "buy," while seven rate it "hold"; median price target is $221.
Shares surge on raised outlook and AI-driven demand
Digital Realty's DLR.N shares surged 14.3% to a three-month high of $204.98 on Friday after it raised its full-year forecast on robust data center demand from AI customers.
The stock was on track for its steepest one-day percentage gain since March 2009.
Full-year guidance and quarterly results beat estimates
The Texas-based REIT late on Thursday said it now sees fiscal 2026 adjusted FFO of $8.15-$8.20 per share, up from $8-$8.10 per share, and revenue of $6.85-$6.95 billion, from a prior view of $6.65-$6.75 billion.
The company posted second-quarter revenue of $1.92 billion and core FFO of $2.65 per share, both beating Wall Street estimates, according to LSEG data.
