Deutsche Bank Comments On Digital Realty Trust Analyst Day

Digital Realty Trust DLR hosted a well-attended analyst day that we believe addressed several key investor concerns. Deutsche Bank came away from the meeting with an increased confidence that the fundamentals in the datacenter market are not deteriorating. A better understanding of some of the conservatism built into 2011 guidance that suggests more upside risk than down to our estimates, and a clearer understanding of DLR's growth profile and drivers. With an expected total return of over 30% to our new TP of $67, DB reiterates its Buy rating. 2011 FFO guidance of $3.70-$3.90 was affirmed. However, for the first time, DLR provided 2011 EBITDA guidance of $605-$635MM, which represents about 23% y/y growth at the midpoint. A clear breakdown of the sources contributing to this growth was also provided. Similarly, Deutsche Bank got additional detail regarding financing activity embedded in DLR's outlook. Deutsche Bank has a $67 PT and Buy rating on DLR