Stifel Raises Digital Realty Trust Price Target to $175, Citing AI Demand and Favorable Market Trends

Stifel analysts raised their price target for Digital Realty Trust (NYSE:DLR) to $175 from $165, while maintaining a Buy rating on the stock. The analysts expressed confidence in the company's ability to meet its 2024 guidance, which includes cash renewals of 5%-7% and same capital NOI growth of 2.5%-3.5%.

The analysts highlighted the favorable macroeconomic environment and strong industry fundamentals, which support increased pricing leverage for Digital Realty. They noted that the company is benefiting significantly from the AI boom and expects the number of deals to accelerate in 2024. Additionally, Digital Realty is anticipated to deliver additional capacity to constrained markets, bolstering its market share and leadership position.

Stifel emphasized that Digital Realty’s operating environment remains robust, with sustained demand and positive leasing trends. The analysts also mentioned that the company's portfolio is well-positioned for upgrades and can pivot to higher density AI deployments, with new builds accommodating liquid cooling on a larger scale.