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Oppenheimer downgraded Equinix (NASDAQ:EQIX) to Perform from Outperform following the company’s Analyst Day. The firm said its rating change is due to valuation concerns and guidance that fell short of expectations.
According to Oppenheimer, investors were anticipating confirmation that AI would drive significant growth, however, management tempered expectations by stating that it is too early to make accurate forecasts while also cautioning that operational and capital expenditures would remain high.
Positively, the firm noted that Equinix’s long-term fundamentals remain strong, and management’s projected revenue growth of 8-10% per year, reaching approximately $12 billion by 2027 would normally be viewed as stellar in isolation, but low vs. Q1/23’s +16% CC and 2023’s 14–15% CC, admittedly boosted by energy pass-throughs.
Meanwhile, TD Cowen raised its price target on the company to $835.00 from $815.00 while maintaining its Outperform rating.
According to the firm, Equinix delivered strong long-term guidance, including organic revenue growth of 8-10% and AFFO/share growth of 7-10%, which aligns with its expectations. However, the firm considers these projections to be slightly conservative.
“Mgmt. remains focused on investing in the biz to capitalize on secular tailwinds and drive continued growth/value creation,” added TD Cowen.
Shares fell more than 3% intra-day today.
