Digital Realty Trust (DLR) CEO Departure to Continue to Pressure Shares, Canaccord Genuity Says

March 18, 2014 11:00 AM EDT
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Price: $106.05 +0.24%

Rating Summary:
    8 Buy, 19 Hold, 2 Sell

Rating Trend: = Flat

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    Up: 24 | Down: 17 | New: 14
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Canaccord Genuity analyst Greg Miller reiterated a Hold rating and $60 price target on Digital Realty Trust (NYSE: DLR) after the company its CEO, Mike Foust, would step down effective immediately and that the company’s CFO, Bill Stein, would take over on an interim basis.

"We believe the unexpected move will continue to pressure the shares of HOLD-rated DLR until it is clear that fundamentals of the business are no longer pressured by the continued excess supply of capacity in the market," Miller said.

Mr. Miller added "Following the suddenly announced resignation of the CEO of managed hosting company Rackspace (RAX: NYSE), we now have our second management change-over on the way in this subsector of the US Communications market. We believe the moves highlight the difficulties in investing in the more volatile sub-segments of the industry (managed hosting or wholesale), in which stark differentiation has become increasingly difficult."

For an analyst ratings summary and ratings history on Digital Realty Trust click here. For more ratings news on Digital Realty Trust click here.

Shares of Digital Realty Trust closed at $52.77 yesterday.

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