Digital Realty Trust Reports Solid Growth Amid Market Challenges

Digital Realty Trust, Inc. (DLR), with a market capitalization of $56.1 billion, is a real estate investment trust (REIT) specializing in the ownership, development, and operation of data centers. The company is headquartered in Austin, Texas, and operates across more than 25 countries, providing a full range of data center, colocation, and interconnection services on six continents.

Market Performance and Year-to-Date Trends

Over the past 52 weeks, DLR shares have significantly outperformed the broader market. The stock has increased by 16%, while the S&P 500 Index ($SPX) has risen by just 8.6%. Despite this, DLR shares are down by 6.1% year-to-date, contrasting with the SPX’s dip of 3.8% for the same period.

Diving deeper, Digital Realty has also exceeded the performance of the Real Estate Select Sector SPDR Fund (XLRE), which saw a 9.6% gain over the last year and a modest 2.3% increase year-to-date.

Q1 2025 Results and Future Guidance

Following the release of its Q1 2025 earnings report on April 24, Digital Realty’s stocks increased by nearly 4%. The company reported revenue of $1.4 billion, which is a 5.7% rise compared to the same quarter last year. Adjusted EBITDA grew by 11.3% year-over-year, reaching $791.2 million. Furthermore, the funds from operations (FFO) per share rose to $1.78, reflecting a 6% increase from the previous year, with core FFO pegged at $1.77 per share.

Moreover, Digital Realty has raised its full-year guidance for 2025. The company anticipates total revenue will be between $5.8 billion and $5.9 billion, while Core FFO is expected to range from $7.05 to $7.15 per share.

Analyst Ratings and Price Targets

For the current fiscal year ending in December 2025, analysts predict a year-over-year increase of 5.7% in core FFO, projecting it to reach $7.09 per share. The company has a strong earnings surprise history, meeting or exceeding consensus estimates over the last four quarters.

Among the 27 analysts covering the stock, the consensus rating is classified as a “Moderate Buy.” This assessment includes 19 “Strong Buy” ratings, one “Moderate Buy,” six “Holds,” and one “Strong Sell.” This is a slight improvement compared to three months ago, when the stock had 18 “Strong Buy” ratings.

On April 25, Jefferies raised DLR’s price target to $193 while maintaining a “Buy” rating. Currently, Digital Realty is trading below the average price target of $184.88. The highest price target of $220 suggests a potential upside of 32.1% from its current price levels.

On the date of publication, Sohini Mondal did not hold positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more details, please review the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.