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On Friday, DigitalBridge Group Inc. (NYSE:DBRG) shares jumped over 10% following reports that the company has caught the interest of private investment firm 26North as a potential acquisition target. The stock, with a market capitalization of $2.09 billion, has shown remarkable momentum with a 37.24% return over the past week. According to InvestingPro data, the stock is currently trading above its Fair Value, with multiple indicators suggesting overbought conditions. JMP Securities analyst Greg Miller maintained a Market Outperform rating and a $16.00 price target on the stock.
Miller highlighted that 26North, an investment company launched in 2022 with $5 billion in assets, is considered a next-generation alternative asset manager and is notably smaller than DigitalBridge. Additionally, there is speculation about a partnership between 26North and Mercuria Energy Group Ltd. for the acquisition. The stock’s beta of 1.59 indicates higher volatility compared to the market, which could present opportunities for investors. InvestingPro subscribers have access to 10+ additional exclusive insights about DBRG’s financial health and market positioning.
Despite DigitalBridge stock’s underperformance compared to the S&P 500 over the last five years, with the exception of the last month, Miller is not surprised by the acquisition interest. He expressed skepticism about the likelihood of a deal but suggested that the news underscores the stock’s undervaluation and the potential for a strong recovery driven by a clearer economic outlook and the robust digital infrastructure market.
Miller reiterated his confidence in DigitalBridge, with the $16 price target representing approximately 27 times the estimated 2026 Free Cash Flow. The analyst’s stance remains unchanged, reflecting a belief in the company’s intrinsic value and its prospects for a price recovery.
In other recent news, DigitalBridge Group Inc. reported its first-quarter 2025 earnings, exceeding analyst expectations with an earnings per share (EPS) of $0.29, compared to the forecasted $-0.004. Despite this strong EPS performance, the company’s revenue fell short of expectations, coming in at $45.45 million against a forecast of $102.21 million. JMP analysts maintained a Market Outperform rating for DigitalBridge, with a reaffirmed price target of $16.00, citing the company’s progress toward its 2025 capital raising goals despite revenue volatility. In contrast, Keefe, Bruyette & Woods adjusted their price target for DigitalBridge to $10.50 from $13.50, maintaining a Market Perform rating due to uncertainties in the macroeconomic environment. DigitalBridge’s strategic initiatives include raising $1.2 billion in new commitments and supporting a major acquisition in the fiber business, which contribute to its long-term growth strategy. The company also reported an 80% year-over-year increase in fee-related earnings, highlighting its strong operational efficiency. These developments reflect DigitalBridge’s ongoing efforts to navigate the complexities of the digital infrastructure sector while managing economic challenges.
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