Citi lifts BXDC rating to Buy while cutting price target

what happened

Seeking Alpha reports that Citi Research upgraded Blackstone Digital Infrastructure Trust to Buy from Neutral. The bank nevertheless reduced its price target to $20.00 from $23.00. The shares were up 1.74% at $16.95 in Monday’s pre-market trading.

Citi analyst Michael Rollins said the company went public intending to acquire high-quality, stabilized data centers occupied by IG-rated hyper-scalers in established data-center markets through a Blind Pool structure. No transactions have been announced so far, leaving Blackstone with an opportunity to deploy the capital it raised.

Rollins said the market will likely apply a higher cap rate to assets BXDC buys later because of the higher interest-rate environment. The research note added that the trust could still remain disciplined and target assets in the upper half of its previously disclosed 5.75%-7.00% buy-box cap-rate range. Citi’s rating matches the Buy rating, while the system grade for the stock is Hold.

why it matters

The update combines a more positive analyst recommendation with a lower valuation target. Investors are focused on the lack of announced acquisitions, the deployment of raised capital and how interest rates affect data-center asset valuations.

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