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On Thursday, Digital Realty Trust (NYSE:DLR), a prominent player in the Specialized REITs industry with a market capitalization of $51.8 billion, received a reaffirmed Strong Buy rating and a $190.00 price target from Raymond (NSE:RYMD) James. According to InvestingPro data, analyst targets for the stock range from $113 to $220, reflecting diverse market expectations for this data center giant. The endorsement follows Digital Realty’s announcement that it is expanding into Indonesia by establishing a joint venture with Bersama Digital Infrastructure Asia (BDIA) to develop and operate data centers across the country.
Digital Realty is investing approximately $100 million for a 50% stake in the joint venture, which includes data centers and adjacent land for future expansion. The company will also earn management and development fees from the partnership. The joint venture, now known as Digital Realty Bersama, has launched a data center, CGK11, in Central Jakarta and plans to develop another, CGK10, in West Jakarta.
The CGK11 facility is poised to increase its IT load capacity to 32 megawatts (MWs) in its next phase of expansion, a significant rise from its initial 5 MWs. The leadership of Digital Realty Bersama will remain with the current local management team, which is seen as a key advantage due to the importance of local expertise in the region.
The strategic move by Digital Realty is expected to strengthen its position in the Asia-Pacific (APAC) region, which is one of the fastest-growing areas globally and where Digital Realty has had the least exposure. With revenue of $5.4 billion in the last twelve months and a robust gross profit margin of 53.65%, the company appears well-positioned for this expansion. For deeper insights into Digital Realty’s growth potential and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks. The venture is anticipated to provide Digital Realty with additional space in Jakarta, a dense population center and a critical location for digital infrastructure.
The CGK11 campus, located less than 5 kilometers from a major carrier hotel hosting nearly 400 carriers, is set to focus on retail colocation and interconnection-heavy workloads. The two campuses in the region, CGK11 and CGK10, are projected to offer a combined potential of 60 MWs of capacity in the market over time, with further opportunities for expansion on the horizon.
In other recent news, Digital Realty Trust has been the focus of multiple analyst updates following its fourth-quarter 2024 earnings release and 2025 guidance. JPMorgan raised its price target for the company to $190, maintaining an Overweight rating, despite lower-than-expected fourth-quarter earnings. The company projects 2025 revenue to range between $5.8 to $5.9 billion, indicating a 4-6% increase, and adjusted EBITDA to rise by 5-9%. Truist Securities also adjusted its price target to $185, aligning its 2025 Core Funds From Operations estimate to $7.07 per share, within the company’s guidance range.
Meanwhile, Citi reduced its price target to $188 but maintained a Buy rating, noting potential growth opportunities underestimated by current projections. Raymond James reiterated a Strong Buy rating with a $190 target, citing strong demand for data centers and confidence in Digital Realty’s future outlook. JMP Securities maintained a $220 target, emphasizing the company’s robust performance and potential to outperform its guidance despite foreign exchange headwinds. These developments underscore a positive outlook for Digital Realty, with analysts highlighting strong demand in the data center market and the company’s strategic positioning.
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