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Investing.com - BMO Capital has reiterated an Outperform rating and $195.00 price target on Digital Realty Trust (NYSE:DLR), despite recent pressure on data center stocks. The target sits well within the analyst range of $140-$220, with InvestingPro data showing the stock currently trading at $165.02.
Data Centers have declined 3.7% over the past month, while Towers fell 8.0%, according to BMO Capital analyst commentary. Higher interest rates have contributed to this pressure, though second-quarter results were generally positive with estimates mostly moving higher. Digital Realty Trust, with its $57.29 billion market cap, has demonstrated resilience with a 14.36% return over the past year.
The firm noted that data center fundamentals remain solid with strong demand and healthy pricing dynamics. This strength is bolstered by hyperscalers signaling their intention to prioritize infrastructure build-outs to support AI development, with investments likely approaching $550 billion in 2026. As a prominent player in the Specialized REITs industry, Digital Realty Trust has maintained dividend payments for 22 consecutive years, showcasing its financial stability.
BMO Capital identified Digital Realty Trust as its top data center pick, expressing confidence in high single-digit Core FFO growth. The firm believes this growth outlook is de-risked by the company’s backlog and building mark-to-market potential.
The research firm projects Core FFO growth of 7.7% in 2025 and 7.9% in 2026 for Digital Realty Trust, with potential for over 10% growth in 2027.
In other recent news, Digital Realty Trust Inc . reported its second-quarter earnings for 2025, significantly surpassing market expectations. The company achieved an earnings per share (EPS) of $2.94, which was substantially higher than the anticipated $0.41, resulting in a surprise of 617.07%. Revenue also exceeded forecasts, reaching $1.49 billion compared to the projected $1.44 billion. Additionally, Citizens JMP maintained a Market Outperform rating for Digital Realty Trust, keeping the stock price target at $220. The firm adjusted its 2025 AFFO per share estimate to $6.68 from $6.66 and its 2026 estimate to $7.26 from $7.24. This adjustment was based on the company’s strong performance in the second quarter of 2025, sustained leasing momentum, and continued pricing power. These developments reflect recent updates and adjustments by analysts regarding Digital Realty Trust.
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