Digital Realty Trust (DLR) reported stronger-than-expected Q4 2025 results. Earnings beat estimates, and 2026 guidance points to continued momentum in digital infrastructure demand.
Sentiment has shifted. After an "Underweight" rating in October 2025, analysts upgraded to "Equal Weight" in February 2026, raising the price target from $161 to $164.
Core FFO per share reached $1.86, up 7.7% YoY, beating consensus by $0.04. Revenue grew 14.4% over the past twelve months, with a gross margin of 55.3%.
For 2026, the midpoint FFO guidance is $7.95 per share, implying 7.6% YoY growth and exceeding the consensus estimate of $7.83.
Competition remains intense from hyperscale cloud providers and telecom firms. Regulatory risks around energy consumption and technological disruption are key threats.
However, Digital Realty benefits from structural tailwinds like cloud adoption and AI workloads. The company has paid dividends for 23 consecutive years, offering a yield of 2.54%.
Barclays Capital set an "Equal Weight" rating and $164 price target on February 6, 2026.
