DigiCo Infrastructure REIT (ASX:DGT) is making impressive progress at its Sydney data center campus, Jefferies said in a note on Thursday, adding that it is confident the next 40-megawatt upgrade to the site will begin soon.
The investment firm said demand is very strong in Sydney and expects the data center operator to be able to lease out additional capacities as they come online.
Possibility of a special dividend is a positive catalyst, along with potential contract wins. The brokerage estimates the company could pay up to AU$0.50 per share in special dividends in fiscal 2027 following the divestment of its US assets.
Jefferies increased its fiscal 2027 and 2028 EBITDA forecasts by 2.4% and 3.3%, respectively, due to higher billing capacity at its Sydney data center campus.
It also upgraded the stock to buy from hold and raised its price target to AU$3 from AU$2.80, adding that DigiCo trades at a discount to its peers.