Digital Realty Trust (NYSE:DLR) Posts Earnings Results, Beats Expectations By $1.58 EPS

Key Points

• Digital Realty reported Q1 Core FFO/EPS of $2.04 and revenue of $1.64B, beating estimates, and updated FY‑2026 guidance to roughly $7.95–$8.10 (EPS/Core FFO range).
• The company delivered record leasing—signed $707M of new leases (≈$423M DLR share) including its largest‑ever 200‑MW AI inference hyperscale deal—and its pipeline scaled to $16.5B with ~1.2 GW under construction that is ~61–68% pre‑leased.
• Management tightened the balance sheet (leverage down to a multiyear low of 4.7x) and closed a $3.25B hyperscale fund with substantial dry powder, but raised CapEx to fund hyperscale buildouts—while the stock still trades at a rich valuation (P/E ~55x) that could cap near‑term upside.

Digital Realty Trust (NYSE:DLR - Get Free Report) announced its earnings results on Thursday. The real estate investment trust reported $2.04 EPS for the quarter, beating analysts' consensus estimates of $0.46 by $1.58, Zacks reports. Digital Realty Trust had a net margin of 21.41% and a return on equity of 5.88%. The business had revenue of $1.64 billion during the quarter, compared to analysts' expectations of $1.63 billion. During the same period in the prior year, the company earned $1.77 earnings per share. The business's revenue was up 16.2% compared to the same quarter last year. Digital Realty Trust updated its FY 2026 guidance to 7.950-8.050 EPS.

Here are the key takeaways from Digital Realty Trust's conference call:

• Digital delivered record leasing—signed $707M of new leases (​$423M at DLR share), including the company's largest-ever 200‑MW AI inference hyperscale lease and a record $98M in 0–1 MW interconnection bookings (21% AI‑oriented).
• Backlog and development ramp—total backlog reached $1.8B ($1.0B DLR share) and the pipeline scaled to $16.5B with ~1.2 GW under construction that is roughly 61–68% pre‑leased and targeting ~11% unlevered yields, giving multi‑year revenue visibility.
• Strong financials and tighter balance sheet—Q1 Core FFO was $2.04 (+15% YoY), management raised full‑year 2026 Core FFO guidance to $8.00–$8.10 (midpoint ~9% growth), and leverage fell to a multiyear low of 4.7x.
• Capital strategy and investment pace—Digital is expanding strategic private capital (closed a $3.25B hyperscale fund and cites ~$10B available plus $8B+ JV dry powder) while increasing CapEx guidance to fund the hyperscale buildout, supporting growth but raising near‑term investment needs.

Digital Realty Trust Price Performance

DLR traded down $1.10 on Thursday, hitting $199.76. 2,735,099 shares of the company were exchanged, compared to its average volume of 2,036,561. The company has a debt-to-equity ratio of 0.81, a quick ratio of 1.59 and a current ratio of 1.59. The business's fifty day moving average is $182.45 and its 200 day moving average is $169.85. Digital Realty Trust has a fifty-two week low of $146.23 and a fifty-two week high of $204.94. The firm has a market capitalization of $69.71 billion, a P/E ratio of 55.49, a price-to-earnings-growth ratio of 4.46 and a beta of 1.07.

Digital Realty Trust Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Friday, March 13th were given a dividend of $1.22 per share. This represents a $4.88 annualized dividend and a yield of 2.4%. The ex-dividend date was Friday, March 13th. Digital Realty Trust's dividend payout ratio is presently 135.56%.

Key Headlines Impacting Digital Realty Trust

Here are the key news stories impacting Digital Realty Trust this week:

• Positive Sentiment: Q1 operating results beat expectations — Digital Realty reported stronger FFO/Core FFO and revenue for 1Q26 (Core FFO ~ $2.04/sh; reported FFO ~ $1.99–$2.04/sh depending on metric reported) and net income improved year-over-year. These beats support the company’s growth trajectory in data-center leasing and drove analyst attention. Digital Realty Reports First Quarter 2026 Results
• Positive Sentiment: FFO and revenue topped consensus — Zacks highlights an FFO beat (around $2.04 vs. ~$1.94 estimate) and revenue slightly above estimates, reinforcing the core cash‑flow story that REIT investors monitor. Digital Realty Trust (DLR) Beats Q1 FFO and Revenue Estimates
• Positive Sentiment: FY26 guidance nudged up — management updated FY26 EPS guidance to roughly $7.95–$8.05 (vs. consensus ~7.94) and gave revenue guidance near $6.7–$6.8B, implying continued steady cash‑flow growth. That guidance stability helped underpin analyst upgrades. View Press Release
• Positive Sentiment: Analysts raised targets — Mizuho bumped its PT to $217 (outperform) and Stifel raised its PT to $230 (buy), signaling buy‑side conviction that upside remains after the beat/guidance. Mizuho Raises Price Target Stifel Raises Price Target
• Positive Sentiment: Additional bullish research notes — Evercore and BMO included positive commentary/forecasts for DLR recently, adding institutional support for the name. Evercore Forecasts Strong Price Appreciation BMO Forecasts Strong Price Appreciation
• Neutral Sentiment: Volume and technicals — Intraday volume was above average and shares recently hit a 12‑month high, indicating active repositioning by investors; moving averages are well below the current price. (See market data sources for details.)
• Negative Sentiment: Valuation is rich — the stock trades at a high P/E (~55x) and elevated PEG (~4.5), which can cap upside and invite profit‑taking even after strong results. This likely helps explain why the share price is trading lower today despite the beats and upgrades.

Analyst Upgrades and Downgrades

DLR has been the subject of a number of research reports. Raymond James Financial reaffirmed a "strong-buy" rating and issued a $210.00 target price on shares of Digital Realty Trust in a report on Thursday, March 12th. Weiss Ratings raised shares of Digital Realty Trust from a "hold (c+)" rating to a "buy (b-)" rating in a report on Tuesday, February 17th. Sanford C. Bernstein assumed coverage on shares of Digital Realty Trust in a report on Thursday, March 5th. They issued an "outperform" rating and a $218.00 target price for the company. Truist Financial assumed coverage on shares of Digital Realty Trust in a report on Tuesday, March 31st. They set a "buy" rating and a $207.00 price target for the company. Finally, Scotiabank increased their price target on shares of Digital Realty Trust from $189.00 to $195.00 and gave the stock a "sector outperform" rating in a report on Tuesday, April 7th. Four equities research analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and eight have assigned a Hold rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $203.67.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. State Street Corp grew its position in Digital Realty Trust by 1.1% during the fourth quarter. State Street Corp now owns 20,649,053 shares of the real estate investment trust's stock worth $3,219,256,000 after buying an additional 231,933 shares during the period. Northern Trust Corp grew its position in Digital Realty Trust by 2.5% during the fourth quarter. Northern Trust Corp now owns 5,787,922 shares of the real estate investment trust's stock worth $895,449,000 after buying an additional 140,388 shares during the period. Dimensional Fund Advisors LP grew its position in Digital Realty Trust by 3.3% during the fourth quarter. Dimensional Fund Advisors LP now owns 4,814,566 shares of the real estate investment trust's stock worth $744,879,000 after buying an additional 151,660 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its position in Digital Realty Trust by 686.0% during the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 4,807,512 shares of the real estate investment trust's stock worth $831,123,000 after buying an additional 4,195,862 shares during the period. Finally, Invesco Ltd. grew its position in Digital Realty Trust by 8.5% during the fourth quarter. Invesco Ltd. now owns 4,433,515 shares of the real estate investment trust's stock worth $685,909,000 after buying an additional 346,200 shares during the period. 99.71% of the stock is currently owned by institutional investors and hedge funds.

Digital Realty Trust Company Profile

Digital Realty Trust, Inc NYSE: DLR is a real estate investment trust that owns, acquires and operates carrier-neutral data centers and provides related colocation and interconnection solutions. The company focuses on large-scale, mission-critical facilities that support the physical infrastructure needs of cloud providers, enterprises, network operators and content companies. Digital Realty's offerings are designed to enable secure, reliable and highly available IT infrastructure with an emphasis on power density, cooling, and physical security.

Digital Realty's product set spans wholesale data center space, turnkey build-to-suit facilities, and retail colocation suites, complemented by interconnection services that allow customers to establish private and public connections to networks, cloud on-ramps and other ecosystem partners.

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