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Investing.com - KeyBanc Capital Markets maintained its Sector Weight rating on Equinix (NASDAQ:EQIX), currently trading at $824.31, following the data center company’s 2025 analyst day on Thursday. According to InvestingPro analysis, the company appears overvalued at current levels, with a market capitalization of $81 billion.
The investment firm expressed increased caution on Equinix stock in the near term, despite acknowledging positive initiatives the company outlined during its presentation. KeyBanc noted Equinix’s plans to build larger facilities addressing power challenges, improve customer value propositions through faster deployment times, and drive greater operating efficiency via platform optimization and artificial intelligence. InvestingPro data shows the company maintains a "GOOD" overall financial health score, with particularly strong ratings in cash flow management and profitability metrics.
KeyBanc highlighted several concerns that influenced its neutral stance, including Equinix’s lowered long-term revenue guidance, reduced adjusted funds from operations per share targets, and decreased dividend growth projections compared to previous expectations.
The firm also pointed to Equinix’s rising capital spending plan and increased leverage profile as additional factors tempering its outlook. KeyBanc specifically mentioned that Equinix’s guidance shows improvement only in 2027 and beyond, creating a lack of near-term catalysts.
While KeyBanc indicated there could be a time to become more constructive on the stock, it recommended patience given Equinix’s decelerating growth in 2026 versus expectations and its premium valuation in the market. The broader analyst community maintains a bullish stance, with a consensus "Buy" rating and price targets ranging from $837 to $1,200. For deeper insights into Equinix’s valuation and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Equinix has outlined significant developments following its Analyst Day event, drawing attention from various financial analysts. The company announced plans to increase capital expenditures significantly, with annual spending expected to reach $4-5 billion through 2029, as it aims to meet the growing demands of enterprise AI workloads. This strategic shift has led to adjustments in analysts’ evaluations, with Scotiabank (TSX:BNS) lowering its price target to $965 and Jefferies to $940, both acknowledging the increased financial commitments. Despite these pressures, both firms maintained positive ratings, with Scotiabank highlighting long-term growth potential and Jefferies expressing confidence in Equinix’s strategy to capitalize on AI market opportunities.
However, BMO Capital downgraded Equinix from Outperform to Market Perform, citing a subdued growth outlook and reduced price target of $850, noting that near-term growth is expected to be more modest. Equinix’s revised forecast projects a 5-9% compound annual growth rate for adjusted funds from operations per share through 2029, reflecting increased capital expenditures and interest expenses. Goldman Sachs reiterated its Buy rating with a $1,020 price target, acknowledging the company’s aggressive investment plans but noting the need for further upside guidance to regain a premium valuation. Meanwhile, Evercore ISI maintained its Outperform rating and $1,035 price target, despite the company’s reduced growth forecast. The company’s ambitious "Build Bolder" initiative aims to double capacity by 2029, indicating a strong commitment to long-term expansion in the digital infrastructure space.
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