Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Monday, Truist Securities revised its price target for DigitalBridge Group Inc. (NYSE:DBRG) stock, lowering it to $13 from the previous $15, while still recommending a Buy rating for the company’s shares. Currently trading at $9.45 with a market capitalization of $1.75 billion, the stock has experienced significant volatility, as revealed by InvestingPro data. The adjustment followed DigitalBridge’s fourth quarter results for the year 2024, leading to a reassessment of the firm’s financial expectations.
Analysts at Truist Securities have revised their forecasted fee-related earnings (FRE) for DigitalBridge for the year 2025, reducing it to $120 million from the previously estimated $123 million. The forecast for 2026 has also been adjusted, now anticipating $125 million in FRE, down from the initial prediction of $137 million. Additionally, the projected distributable earnings (DE) per share for 2025 have been decreased to $0.35 from $0.49, and for 2026 to $0.39 from $0.60. InvestingPro analysis shows the company currently trades at a high earnings multiple with a P/E ratio of 136.38, while maintaining a FAIR overall financial health score.
The revisions to DigitalBridge’s price target and earnings forecast are based on several underlying assumptions in Truist’s financial model. One key assumption includes the expectation that DigitalBridge’s fee-earning equity under management (FEEUM) will reach $40 billion by the end of 2025. The new 12-month price target of $13 is derived from a discounted cash flow (DCF) analysis, which yielded $14.99 per share using a 10% discount rate and a next twelve months (NTM) 23x FRE target multiple. According to Truist, the new price target suggests a total return of 41%.
Truist Securities highlights DigitalBridge’s position as a specialist in digital infrastructure, noting the company’s scalable platform and robust portfolio, which includes assets like data centers and towers. The firm’s extensive network relationships, experienced operating partners, and the secular growth trends in the digital infrastructure sector are seen as key drivers that could lead to outperformance, attract new investors, and accelerate the growth of DigitalBridge’s FEEUM. According to InvestingPro, analysts maintain a strong bullish consensus with a high target of $20, suggesting significant upside potential. Subscribers can access the comprehensive Pro Research Report for deeper insights into DigitalBridge’s financial health and growth prospects.
In other recent news, DigitalBridge Group Inc. has announced that its portfolio company, Zayo, has signed a definitive agreement to acquire Crown Castle’s Fiber Solutions business for approximately $4.25 billion. This acquisition is expected to significantly enhance Zayo’s network infrastructure by integrating Crown Castle (NYSE:CCI)’s fiber assets, which include about 90,000 route miles of fiber. Meanwhile, a consortium involving DigitalBridge and Crestview Partners is reportedly in advanced discussions to acquire WideOpenWest, although the terms have not been finalized, and the deal could still fall through.
Additionally, DigitalBridge’s stock target was adjusted by two analyst firms. Keefe, Bruyette & Woods (KBW) lowered their price target for DigitalBridge to $13.50, maintaining a Market Perform rating after reviewing the company’s fourth-quarter performance. Conversely, Raymond (NSE:RYMD) James increased their price target to $17.00, reaffirming a Strong Buy rating following a significant beat in fee revenue and fee-related earnings in the fourth quarter. The firm noted that DigitalBridge’s guidance for fee-earning assets under management (FEEUM) in 2025 was slightly below expectations, but the fee-related earnings guidance exceeded their forecasts.
In another development, Matt Evans, the head of Europe for DigitalBridge, has stepped down to explore new opportunities. Evans had been with the company since November 2021, previously holding significant roles at AMP (OTC:AMLTF) Capital and Macquarie Group Ltd (OTC:MQBKY). These recent developments reflect DigitalBridge’s ongoing strategic initiatives and adjustments in leadership and market positioning.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.