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Investing.com - Mizuho (NYSE:MFG) maintained its Outperform rating on Equinix (NASDAQ:EQIX) but lowered its price target to $900 from $1,069, citing revised growth projections and near-term headwinds. Currently trading at $795.47, Equinix maintains a strong "Buy" consensus among analysts, with targets ranging from $837 to $1,200, according to InvestingPro data.
The investment firm reduced its fiscal year 2026 top-line growth forecast for the data center company to 8.2% from its previous estimate of 8.6%. Mizuho also cut its adjusted funds from operations (AFFO) projection to $39.97 from $41.12, suggesting 5.3% growth next year. The company has demonstrated consistent growth, with a 5-year revenue CAGR of 11% and maintains a "GOOD" overall financial health score.
Mizuho identified that over 70% of Equinix’s capital expenditure is allocated to developing new IBX centers, which creates near-term dilution. The firm’s analysis suggests this may not negatively impact Equinix’s multiple, contrary to widely held market perceptions.
Financing challenges represent another headwind for Equinix, with the company facing expiring debt at very low coupon rates and potential increases in U.S. interest rates, according to Mizuho’s research note.
The revised $900 price target assumes a 21x multiple, in line with current valuation metrics, and implies a 13% upside potential for Equinix shares. Mizuho views its fiscal year 2027 AFFO growth projection of 7% as "somewhat conservative."
In other recent news, Equinix has been the subject of various analyst assessments following its Analyst Day presentations. CFRA downgraded Equinix from Strong Buy to Buy, reducing its price target to $850 due to uncertainties in data center demand, particularly outside the U.S. The firm maintained its funds from operations estimates for 2025 and 2026, aligning with consensus estimates. Stifel also lowered its price target to $1,010, citing expansion costs and an accelerated capital plan, but maintained a Buy rating. Meanwhile, JPMorgan kept its Overweight rating and a $935 price target, highlighting Equinix’s AI growth potential despite disappointing financial guidance. Citi adjusted its price target to $950, emphasizing retail capacity expansion and higher financing costs, yet retained a Buy rating. Citizens JMP maintained a Market Outperform rating with a $1,200 price target, noting significant growth potential in AI infrastructure. These recent developments indicate varied analyst perspectives on Equinix’s financial outlook and growth opportunities.
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