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Key Factors to Impact Digital Realty's (DLR) Q2 Earnings
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Digital Realty Trust (DLR - Free Report) is scheduled to release second-quarter 2020 earnings on Jul 30, after the bell. While the company’s results will likely reflect year-on-year growth in revenues, funds from operations (FFO) per share might display a decline.
In the last reported quarter, this San Francisco, CA-based data-center real estate investment trust (REIT) reported a negative surprise of 0.65% in terms of funds from operations (FFO) per share.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on three occasions, and missed in the other, the average beat being 1.08%. This is depicted in the chart below:
Let’s see how things have shaped up for Digital Realty prior to this announcement.
Factors to Consider
Demand for space at data-center REITs’ properties has been shooting up on growth in cloud computing, Internet of Things, artificial intelligence and big data, and an increasing number of companies opting for third-party IT infrastructure.
The heightening reliance on technology in the wake of the pandemic has now become an added advantage, thanks to the work-from-home trend, e-retail and e-learning gaining popularity, spurring demand for data-center space. Demand has been, in fact, outpacing supply in top-tier data-center markets and despite enjoying high occupancy, these markets are absorbing new construction at a faster pace.
Therefore, Digital Realty is likely to have gained from solid fundamentals of the data-center market in the to-be-reported quarter. The full spectrum of data-center solutions across a global platform is likely to have helped the company lure tenants, with several having multiple locations across the portfolio.
The company has also been banking on acquisitions and development efforts for building a premium portfolio of high-quality facilities located across North America, Europe, Latin America, Asia and Australia. These are likely to have contributed to its performance in the quarter.
In June, Digital Realty announced the ground breaking for its first facility in South Korea. Moreover, the company announced its entry into the Mexico market in association with Ascenty, a Latin American data-center service provider and Digital Realty’s joint-venture (JV) company with Brookfield Infrastructure.
The Zacks Consensus Estimate for the quarterly total revenues is $915.6 million, indicating a 14.3% year-over-year increase.
However, given the solid growth potential in the data-center real estate market, competition has intensified in its markets. This is likely to have resulted in aggressive pricing pressure in the quarter under review. In addition to this, interest-expense burden is a concern, with the REIT having a substantial debt position.
Digital Realty’s activities during the soon-to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the second-quarter FFO per share remained unchanged at $1.48 in a month’s time. It also indicates a decline of 9.8%, year on year.
Here is what our quantitative model predicts:
Our proven model predicts a positive surprise in terms of FFO per share for Digital Realty this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Digital Realty carries a Zacks Rank #3 and has an Earnings ESP of +2.70%.
Other Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Healthcare Trust of America, Inc. , set to report quarterly numbers on Aug 6, currently has an Earnings ESP of +0.96% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
SBA Communications Corporation (SBAC - Free Report) , slated to release results on Aug 3, has an Earnings ESP of +4.48% and carries a Zacks Rank of 3, at present.
National Storage Affiliates Trust (NSA - Free Report) , scheduled to announce earnings figures on Aug 6, has an Earnings ESP of +0.44% and holds a Zacks Rank of 3 currently.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Key Factors to Impact Digital Realty's (DLR) Q2 Earnings
Digital Realty Trust (DLR - Free Report) is scheduled to release second-quarter 2020 earnings on Jul 30, after the bell. While the company’s results will likely reflect year-on-year growth in revenues, funds from operations (FFO) per share might display a decline.
In the last reported quarter, this San Francisco, CA-based data-center real estate investment trust (REIT) reported a negative surprise of 0.65% in terms of funds from operations (FFO) per share.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on three occasions, and missed in the other, the average beat being 1.08%. This is depicted in the chart below:
Digital Realty Trust, Inc. Price and EPS Surprise
Digital Realty Trust, Inc. price-eps-surprise | Digital Realty Trust, Inc. Quote
Let’s see how things have shaped up for Digital Realty prior to this announcement.
Factors to Consider
Demand for space at data-center REITs’ properties has been shooting up on growth in cloud computing, Internet of Things, artificial intelligence and big data, and an increasing number of companies opting for third-party IT infrastructure.
The heightening reliance on technology in the wake of the pandemic has now become an added advantage, thanks to the work-from-home trend, e-retail and e-learning gaining popularity, spurring demand for data-center space. Demand has been, in fact, outpacing supply in top-tier data-center markets and despite enjoying high occupancy, these markets are absorbing new construction at a faster pace.
Therefore, Digital Realty is likely to have gained from solid fundamentals of the data-center market in the to-be-reported quarter. The full spectrum of data-center solutions across a global platform is likely to have helped the company lure tenants, with several having multiple locations across the portfolio.
The company has also been banking on acquisitions and development efforts for building a premium portfolio of high-quality facilities located across North America, Europe, Latin America, Asia and Australia. These are likely to have contributed to its performance in the quarter.
In June, Digital Realty announced the ground breaking for its first facility in South Korea. Moreover, the company announced its entry into the Mexico market in association with Ascenty, a Latin American data-center service provider and Digital Realty’s joint-venture (JV) company with Brookfield Infrastructure.
The Zacks Consensus Estimate for the quarterly total revenues is $915.6 million, indicating a 14.3% year-over-year increase.
However, given the solid growth potential in the data-center real estate market, competition has intensified in its markets. This is likely to have resulted in aggressive pricing pressure in the quarter under review. In addition to this, interest-expense burden is a concern, with the REIT having a substantial debt position.
Digital Realty’s activities during the soon-to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the second-quarter FFO per share remained unchanged at $1.48 in a month’s time. It also indicates a decline of 9.8%, year on year.
Here is what our quantitative model predicts:
Our proven model predicts a positive surprise in terms of FFO per share for Digital Realty this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Digital Realty carries a Zacks Rank #3 and has an Earnings ESP of +2.70%.
Other Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Healthcare Trust of America, Inc. , set to report quarterly numbers on Aug 6, currently has an Earnings ESP of +0.96% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
SBA Communications Corporation (SBAC - Free Report) , slated to release results on Aug 3, has an Earnings ESP of +4.48% and carries a Zacks Rank of 3, at present.
National Storage Affiliates Trust (NSA - Free Report) , scheduled to announce earnings figures on Aug 6, has an Earnings ESP of +0.44% and holds a Zacks Rank of 3 currently.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>