Macquarie Says NextDC's M3 Delay Highlights Value of Existing Capacity

what happened

According to Market Talk, an analyst at Macquarie, who keeps an outperform rating on NextDC, views the potentially costly delay to the M3 data-center expansion as largely confined to one project. In a client note, the analyst says the problem is power availability, so the affected customer will struggle to find alternative capacity. Options from other suppliers are highly limited, which in his view raises the value of NextDC's capacity with secured power. He described the scarcity as immense.

why it matters

For investors, the delay affects a specific project rather than the whole business, while the shortage of powered space increases the importance of the company's existing assets. Macquarie's target price is 19.70 Australian dollars, while the shares trade at A$5.25, well below that level.

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