Digital Realty upgraded to Outperform from Sector Perform at Scotiabank

As previously reported, Scotiabank upgraded Digital Realty to Outperform from Sector Perform with a price target of $157, up from $155. As digitization and increased use of AI drives increased data center demand, the firm believes that digital infrastructure investments have “a long investment upside window into the future,” the analyst tells investors. 2024 guidance will not likely reflect underlying growth given management’s focus to de-lever, which will dampen FFO growth in the short term and should make the dividend remain “essentially flat” in 2024 as a consequence, but the firm sees deleveraging providing a “more sustainable path towards value creation,” the analyst added.