Summary

  • J.P. Morgan upped its rating on digital real estate firm DigitalBridge to ‘overweight’ from ‘neutral’ while raising the price target on the stock to US$21.61.
  • Broker J.P. Morgan sees potential in the company’s capital growth as it approaches the completion of its digital transformation.
  • DigitalBridge reported assets under management of US$72.2 billion and revenue of over US$27 million in Q2 2023.

REIT firm DigitalBridge (NYSE: DBRG) received a rating upgrade from broker J.P. Morgan before market open on September 28, 2023.

DigitalBridge is an REIT firm specializing in digital infrastructure. The company’s Digital Operating segment, responsible for digital asset ownership and leasing, generates most of the firm's revenue, with a primary market presence in the United States.

J.P. Morgan increased its rating on DigitalBridge from ‘neutral’ to ‘overweight’, while raising its price target to US$25 from US$19. The renewed price target represents an upside potential of 51.24% over DBRG’s closing price on Thursday.

DBRG Price Chart; Source: EODHD/Others

DBRG closed 1.34% higher on Wednesday, September 27, 2023, at US$16.53. As at the close of trade on September 28, 2023, DBRG’s YTD gains stood at 51.09% and 6-month gains were 43.73%.

Brokers maintain a ‘moderate buy’ rating on DBRG

EODHD/Others data suggests that of the 9 analysts covering DBRG, one has given it a ‘strong buy’ rating and a majority of eight analysts have given it a ‘buy’ rating. The mean recommendation rating on the stock is 1.9 on five.

Here, the rating score of one is indicative of a ‘strong buy’ rating and the rating score of five is representative of a ‘strong sell' rating. The consensus mean price target is US$21.61, a potential increase of 30.73% over DBRG’s closing price on Wednesday.

Truist Securities maintained a ‘buy’ rating on DBRG, with a price target of US$20. Wells Fargo also kept its ‘overweight’ rating intact on DBRG with a price target of US$20.

Meanwhile, Raymond James upgraded DBRG to ‘strong buy’ on September 14, 2023. Meanwhile, B. Riley and TD Cowen both maintained a ‘moderate buy’ rating on DBRG.

J.P. Morgan expects capital growth for DBRG

The brokerage has stated that it is positive on DigitalBridge’s capital growth as the company nearly reaches the end of its business transformation. The said transformation would allow DigitalBridge to focus on managing digital investment and streamlining operational results.

Adding to that, J.P. Morgan stated that DBRG would be able to generate capital in a steadier financial ecosystem as rates level off and digital infrastructure gets broader. This broadening would be provided by the inclusion of provisions such as pension, sovereign wealth, and other infrastructure funds in the digital infrastructure space.

The broker believes that alternative asset managers and digital infrastructure offer a highly attractive avenue for investors, given their long-term growth prospects, scale and return potential.

Image Source: ©2023 Kalkine®; Data Source: Company Reports

DigitalBridge’s assets under management rose by a whopping 51% year-on-year in Q2 2023 to US$72.2 billion. Meanwhile, its Q2 2023 revenue stood at  US$27.6 million, down 32% on a year-on-year basis.

DBRG will be paying its shareholders a cash dividend of US$0.01 per common share on October 16, 2023. The ex-dividend date for cash dividend is September 30, 2023.