Macquarie keeps Outperform on NextDC and cuts target almost 35% to A$12.90

what happened

Macquarie's analyst on Australian data-center operator NextDC tells investors to buy when there is blood on the streets. According to Market Talk, the investment bank sees the shares as oversold amid what it views as peak pessimism toward the company and the sector. The analyst calls the delay to the Melbourne M3 center a bad look, but says NextDC still controls several catalysts.

Macquarie expects deleveraging and a pause in growth capital spending to push free cash-flow yield above 10% by fiscal 2031. The bank cut its target price almost 35% to A$12.90 but kept its outperform rating. At the time of the report, NextDC shares were up 5.3% at A$5.635.

why it matters

A lower target with an unchanged positive rating suggests Macquarie has become more cautious on the operator's valuation, while still backing a recovery in cash generation. For the market, the focus is shifting from growth spending to debt reduction and free cash flow, which will shape the stock's direction. The news concerns one company and the data-center sector, so its reach beyond them is limited.

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