Deutsche Bank rates NXT as Downgrade to Sell from Hold (5) -
Deutsche Bank has downgraded to Sell from Hold, arguing the market is ignoring the risks that are attached to the company's significant expansion. The broker also points at the valuation premium vis-a-vis offshore peers.
The current significant increase in capex will weigh on NextDC's free cash flow generation, point out the analysts. Their negative stance is centred around the prediction that greater demand driven by hyperscale service providers is likely to lead to a deterioration in pricing. Target $6.50 (was $7.10).
Target price is $6.50 Current Price is $7.19 Difference: minus $0.69 (current price is over target).
If NXT meets the Deutsche Bank target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $7.95, suggesting upside of 10.6% (ex-dividends)
The company's fiscal year ends in June
NXT Price at posting:
$7.20 Sentiment: Hold Disclosure: Held
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