Wednesday, Truist Securities revised its price target on shares of DigitalBridge Group Inc. (NYSE:DBRG) to $17.00, down from the previous $17.00, while maintaining a Buy rating on the stock. The adjustment comes in response to the company's Q2 results for the year 2024.
The firm has modified its forecasted Fee Related Earnings (FRE) for DigitalBridge, reducing the 2024 estimate to $151 million from $153 million and the 2025 estimate to $157 million from $158 million. Truist Securities has increased its Distributable Earnings (DE) per share estimates for 2024 to $0.51 from $0.46 and for 2025 to $0.61 from $0.53.
The higher DE for 2025 is primarily attributed to an anticipated increase in realized principal income.
The analyst's model for DigitalBridge includes assumptions such as Fee-Earning Equity Under Management (FEEUM) reaching $35 billion by the end of 2024 and fee revenues totaling $337 million, which encompasses $40 million in catch-up fees.
The new price target is based on a Discounted Cash Flow (DCF) analysis, which values the stock at $22.58 per share, applying a 9.8% discount rate and a Next Twelve Months (NTM) 16x FRE target multiple. According to Truist Securities, the new price target suggests a potential total return of 41% for DigitalBridge Group Inc. shares.
In other recent news, DigitalBridge Group Inc. reported a strong financial performance in the second quarter of 2024, with an 18% year-over-year increase in management fee revenues.
The company has raised $14 billion in capital this year, 80% of which is allocated for data center investments. DigitalBridge also plans to raise an additional $7 billion in new capital by the end of the year. Deutsche Bank (ETR:DBKGn) has adjusted its outlook for DigitalBridge, reducing the price target to $16, while maintaining a Buy rating.
TD Cowen has reaffirmed its Buy rating on DigitalBridge shares, maintaining a steady price target of $19. The company's global data center portfolio is expected to expand from 4 gigawatts to 7.5 gigawatts over the next five years, aiming to meet the growing demand for AI infrastructure.
DigitalBridge is confident in achieving $150 million in fee-related earnings for the full year and sees a $30 billion growth opportunity in AI data center infrastructure.
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