Austin, Texas-based Digital Realty Trust, Inc. (DLR) brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. With a market cap of $60.9 billion, Digital Realty engages in the ownership, acquisition, repositioning, and management of technology-related real estate.
The REIT is set to announce its fourth-quarter results after the market closes on Thursday, Feb. 13. Ahead of the event, analysts expect DLR to report core funds from operations (FFO) of $1.66 per share, up 1.8% from $1.63 per share reported in the year-ago quarter. While the company has matched or surpassed Wall Street’s FFO projections thrice over the past four quarters, it has missed the estimates on one other occasion.
For the full fiscal 2024, Digital Realty is expected to deliver a core FFO of $6.71 per share, up 1.8% from $6.59 per share in fiscal 2023. While in fiscal 2025, its FFO is expected to increase 5.7% year-over-year to $7.09 per share.
DLR has soared 29.8% over the past 52-week period, outperforming the S&P 500 Index’s ($SPX) 25.5% surge and the Real Estate Select Sector SPDR Fund’s (XLRE) 5.7% gains during the same time frame.
DLR surged over 9.6% in the trading session after the release of its impressive Q3 results on Oct. 24. The company posted over $520 million in new leasing and observed record leasing across both the greater-than-a-megawatt and 0-1 MW plus interconnection segments. Its backlog now represents over 20% of annualized in-place data center revenue, enhancing its visibility and positioning the company for accelerating longer-term growth.
The company reported a notable 2.1% year-over-year growth in total operating revenues, reaching $1.4 billion, driven by the robust 7.8% growth in rental revenues to $956.4 million, exceeding analysts’ projections. Additionally, its core funds from operations per share (FFO) grew 3.1% compared to the year-ago quarter to $1.67 matching analysts’ estimates. Observing the growth in leasing activities, Digital Realty raised its 2024 core FFO per share and constant-currency core FFO per share outlook to $6.65 - $6.75, bolstering investors’ confidence.
The consensus opinion on DLR is moderately bullish with an overall “Moderate Buy” rating. Out of the 25 analysts covering the REIT, 16 recommend “Strong Buy,” one suggests “Moderate Buy,” seven advise “Hold,” and one advocates a “Strong Sell” rating. Its mean price target of $187.69 represents a modest 2.9% premium to current price levels.
