As previously reported, KeyBanc initiated coverage of Equinix with a Sector Weight rating, with positive factors balanced by premium valuation. The firm believes Equinix warrants a premium valuation though it sees better relative value in Towers. KeyBanc thinks Equinix’s global portfolio of colocation, interconnection, and digital services are differentiating characteristics, resulting in strong financial performance. With 8%-10% revenue growth and a 7%-10% AFFO/share growth as long-term guidance through 2027, the firm is “left wondering what upside remains” and when one will see operating leverage. Further, KeyBanc argues that organic growth is not as strong as most believe.
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