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On Friday, CFRA analyst Kenneth Leon upgraded Equinix (NASDAQ:EQIX) stock from Hold to Strong Buy, setting a price target of $985.00. With the stock currently trading at $803.01 and a market capitalization of $78.14 billion, Leon highlights the current share price as an attractive entry point for investors. According to InvestingPro data, analysts maintain a strong bullish consensus with price targets ranging from $809 to $1,200. The target is based on a forward price to funds from operations (P/FFO) multiple of 36.5 times, which is a premium compared to Equinix’s peers in the data center sector. This premium is justified by the company’s market leadership in a rapidly expanding industry. InvestingPro analysis reveals a "GOOD" overall financial health score, with particularly strong ratings in cash flow and growth metrics.
The analyst’s assessment also takes into account a valuation metric that puts the current share price at 20.5 times total enterprise value (TEV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) based on a 2025 EBITDA estimate of $4.41 billion. The $985 target price corresponds to 24.1 times TEV/EBITDA, which is below the three- and five-year historical averages of 29.6 times and 29.2 times, respectively.
Leon maintains his funds from operations (FFO) estimates for Equinix at $27.00 for the year 2025 and $29.30 for 2026. He emphasizes that Equinix stands at the core of technology markets, serving as a global provider of data centers essential for artificial intelligence (AI) and cloud computing services. The company has demonstrated solid performance with revenue growth of 6.59% in the last twelve months and offers a dividend yield of 2.27%.
In October of the previous year, Equinix announced a significant expansion plan. The company revealed its intention to nearly triple its investment in its xScale data center portfolio through a $15 billion joint venture with the Canada Pension Plan Investment Board. The venture aims to construct cutting-edge xScale facilities across multiple campuses.
Leon concludes by noting that industry fundamentals for Equinix are favorable, with ongoing supply constraints in the market, suggesting a strong outlook for the company’s growth and performance. For deeper insights into Equinix’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which includes detailed analysis of the company’s competitive position and future potential.
In other recent news, Equinix has experienced a series of analyst adjustments following its latest earnings report. Wolfe Research upgraded Equinix to an Outperform rating, setting a price target of $978, highlighting the company’s growth potential and its strategic market position. Meanwhile, BMO Capital Markets revised its price target for Equinix to $1,045, maintaining a Market Perform rating, while also emphasizing the company’s position as a top data center pick despite subdued near-term growth. TD Cowen also reduced its price target to $978 but maintained a Buy rating, noting Equinix’s strong bookings and expected EBITDA margin improvements in 2025.
Jefferies lowered its price target to $1,140, continuing to recommend the stock as a Buy, and pointed to foreign exchange headwinds and capacity constraints as factors affecting recent performance. Despite these challenges, Jefferies highlighted increased demand for AI capabilities as a positive indicator for Equinix’s future. Equinix’s fourth-quarter results for 2024 did not meet expectations, with guidance for 2025 also falling short. However, the company reported record gross bookings and a high backlog, suggesting potential for future growth.
BMO Capital Markets, while slightly lowering its price target to $1,065, retained an Outperform rating, citing Equinix’s robust fundamentals and anticipated margin expansion. These developments reflect a mixed but generally optimistic outlook from analysts regarding Equinix’s future performance amidst current challenges.
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