DigitalBridge stock target raised to $17 by Raymond James

On Thursday, Raymond (NSE:RYMD) James analysts adjusted their outlook on DigitalBridge Group Inc. (NYSE: DBRG), increasing the price target from $16.00 to $17.00 while reaffirming a Strong Buy rating. The revision followed DigitalBridge’s fourth-quarter earnings, which revealed a significant beat in fee revenue and fee-related earnings (FRE), partly due to approximately $10 million in catch-up fees. According to InvestingPro data, analyst consensus remains highly bullish with a 1.44 rating, while price targets range from $14 to $20, suggesting significant upside potential from the current price of $12.36.

DigitalBridge’s initial guidance for fee-earning assets under management (FEEUM) in 2025 was slightly below Raymond James’ expectations, projecting over $40 billion compared to their estimate of $42.4 billion. However, the FRE guidance for the same period was above Raymond James’ forecast of $121.5 million but fell short of the broader market’s expectation of $126.5 million. InvestingPro analysis shows the company maintains a solid financial health score of 2.67 (rated as GOOD), with particularly strong metrics in relative value and growth potential.

Analysts noted that, following a substantial guidance reduction in the third quarter of 2024 and several long-term guidance reductions in the past, DigitalBridge and its relatively new CFO Tom Mayrhofer appear to have adopted a more conservative approach to their forecasts. This strategy suggests that the company may have opportunities to outperform and upgrade its guidance throughout the year.

The report also highlighted challenges in the broader capital markets, such as slowed fundraising due to a lack of exits for limited partners (LPs) and a fundraising mix more inclined toward lower-fee-earning co-investment and credit vehicles. Despite these headwinds, analysts anticipate an uptick in mergers and acquisitions (M&A) activity. DigitalBridge has indicated that flagship fundraising will be a priority in 2025, with an expected shift in LP allocations toward alternative investments, particularly in infrastructure and digital infrastructure sectors.

At DigitalBridge’s 2024 Investor Day, the company projected its FEEUM to reach $60-70 billion by the end of 2028, suggesting a compound annual growth rate (CAGR) of approximately 20%, which would mark an acceleration from the 2025 growth rate. The company’s impressive revenue growth of 680% over the last twelve months demonstrates its strong execution capabilities. For deeper insights into DigitalBridge’s growth trajectory and comprehensive analysis, investors can access the full Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed metrics and expert analysis.

The analysis concluded by addressing the possibility of DigitalBridge being an acquisition target for larger alternative asset managers, given the volatility of fundraising for smaller-scale firms. Additionally, DigitalBridge’s consideration of acquiring other asset managers was mentioned, although the likelihood of such a transaction is considered high due to the company’s current stock price levels and leverage, including preferred stock.

In other recent news, DigitalBridge Group Inc. has maintained its Market Outperform rating with a price target of $16.00, as reiterated by analysts at Citizens JMP. This comes as the company continues its strategic transformation under CEO Marc Ganzi, focusing on managing digital infrastructure assets. Analysts have observed that DigitalBridge is divesting underperforming assets, which has led to a significant shift in the company’s business fundamentals. The anticipated increase in full fee-generating assets under management is expected to drive future performance, with growth projected to continue through 2025.

JMP Securities has also initiated coverage on DigitalBridge, along with other key players in the digital infrastructure sector, assigning them Market Outperform ratings. This move is aligned with expectations of a substantial increase in digital infrastructure spending, projected to exceed $1 trillion over the next five years. The anticipated spending surge is expected to support advancements in AI, cloud computing, and edge computing. The companies under JMP’s coverage are well-positioned to benefit from this robust spending trajectory, reflecting confidence in their potential to shape the future digital landscape.

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