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On Wednesday, Keefe, Bruyette & Woods (KBW) adjusted the price target for DigitalBridge Group Inc. (NYSE: DBRG) shares, reducing it to $13.50 from the previous $14.00, while retaining a Market Perform rating on the stock. The adjustment comes after the firm’s review of the fourth quarter performance and future estimates, taking into account several influencing factors.
Analysts at KBW have revised their forward estimates for DigitalBridge following the company’s fourth-quarter results. They anticipate a gain from the DataBank financing in the first quarter of 2025 and expect a slightly higher blended fee rate. However, this is partially offset by a more modest growth in Fee-Earning Equity Under Management (FEEUM). The analysts predict that due to the anticipated fundraising mix and the gain in the first quarter, earnings for DigitalBridge will likely be more significant in the first half of the year. InvestingPro data shows the company has maintained profitability over the last twelve months, with a P/E ratio of 14.58x and a healthy gross profit margin of 100%.
The revised price target reflects KBW’s analysis of DigitalBridge’s valuation. The stock is currently trading at an estimated 17 to 19 times the firm’s 2026-2027 earnings per share (EPS) projections, which includes stock compensation. Based on these estimates, KBW views DigitalBridge shares as fairly valued and has therefore decided to maintain the Market Perform rating.
The analyst’s commentary provided insights into the rationale behind the rating and price target adjustments. "Post-4Q, we adjust forward estimates to reflect several factors including an anticipated 1Q25 gain on the DataBank financing, a slightly higher blended fee rate, partly offset by more modest FEEUM growth. Given anticipated fundraising mix and the 1Q gain, earnings will be weighted to the first half. Trading at an estimated 17-19x our 2026-2027 EPS estimates including stock comp., we see the shares as fairly valued. Maintain Market Perform," stated the KBW analyst.
DigitalBridge Group Inc. specializes in digital infrastructure investments and is monitored by various research firms, including KBW, which provides regular updates on the company’s stock performance and outlook. For investors seeking deeper insights, InvestingPro offers exclusive access to 6 additional ProTips and comprehensive financial metrics, along with detailed analysis available in the Pro Research Report, which is part of their coverage of over 1,400 US equities.
In other recent news, DigitalBridge Group Inc. has reported a significant beat in its fourth-quarter earnings, particularly in fee revenue and fee-related earnings, partly due to approximately $10 million in catch-up fees. Raymond (NSE:RYMD) James analysts responded by raising the company’s stock target from $16.00 to $17.00, maintaining a Strong Buy rating. DigitalBridge’s fee-earning assets under management (FEEUM) guidance for 2025 was slightly below Raymond James’ expectations, but its fee-related earnings guidance surpassed the firm’s projections. Meanwhile, Citizens JMP analysts have reaffirmed a Market Outperform rating with a price target of $16.00, citing the company’s strategic transformation under CEO Marc Ganzi and its shift towards managing digital infrastructure assets.
Additionally, JMP Securities has initiated coverage on DigitalBridge, along with other digital infrastructure companies, assigning a Market Outperform rating. This move aligns with expectations of a significant rise in digital infrastructure spending, projected to exceed $1 trillion over the next five years. The anticipated increase in spending is expected to support developments in AI, cloud computing, and edge computing. DigitalBridge’s strategic focus and the broader industry’s growth potential have contributed to the positive outlook from analysts. These developments highlight DigitalBridge’s ongoing efforts to streamline operations and capitalize on the digital infrastructure sector’s growth trajectory.
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