KeyBanc Downgrades Digital Realty Trust (DLR) to Hold; Remain Cautious on 2012 Growth Prospects

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DLR Hot Sheet

Rating Summary:
2 Buy, 10 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23

KeyBanc downgraded Digital Realty Trust (NYSE: DLR) from Buy to Hold.

KeyBanc analyst says, "While we remain bullish on the fundamental outlook for the data center space, we are more cautious on DLR’s growth prospects in 2012. DLR has traditionally grown earnings through higher rents, redevelopment leasing and acquisitions. While the redevelopment pipeline will likely remain steady, acquisitions have moderated from the robust pace in 2010. In addition, shorter construction lead times (i.e., lower cost/risk) and increased competition among industry players have put a governor on market rents. When coupled with DLR’s larger revenue and investment base ($11 billion total enterprise value), earnings growth could fall short of expectations. Accordingly, we would take profits at current levels and reinvest in CoreSite (NYSE: COR) and DuPont Fabros (NYSE: DFT)."

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 $67.16 yesterday, with a 52 week range of $50.63-$68.01.

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