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Investing.com - Jefferies initiated coverage on DigiCo Infrastructure REIT (ASX:DGT) with a Hold rating and a price target of AUD3.70 on Monday.
The research firm noted that DigiCo’s U.S. assets are fully leased to blue-chip customers, providing the company with steady income and rent escalations to fund development projects in other locations.
Jefferies highlighted potential challenges for DigiCo in expanding its Sydney facility, known as SYD1, where leasing activities might progress more slowly than anticipated.
The analyst report pointed to DigiCo’s "very high" gearing as a concern for the infrastructure REIT’s financial position.
Jefferies concluded that DigiCo’s current valuation "is not compelling enough given the risks" associated with the company’s operations and financial structure.
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