EQIX - Equinix cut to Equal Weight at Wells Fargo ahead of Q2 earnings

2023-07-21 11:12:19 ET

Wells Fargo downgraded Equinix ( NASDAQ: EQIX ) stock to Equal Weight from Overweight, calling the data center REIT a "crowded long with less room for valuation upside."

That's because the stock is trading at 25 times next twelve months AFFO, or a yield spread of 10 basis points over the 10-uear U.S. Treasury yield (nearing a record low), the firm wrote in a note. Since the start of 2023, EQIX climbed 22.6%.

In addition, EQIX -- slated to publish its second-quarter earnings on July 27 -- is expected to revise its guidance slightly higher, although that's already reflected in consensus, Wells Fargo said.

Analysts, meanwhile, have lowered their FFO estimates for Q2 by 0.2% over the last three months and 1.5% over the last six months.

The Equal Weight rating aligns with the SA Quant system rating of Hold and disagrees with the average sell-side analyst rating of Buy.

More on Equinix:

• Equinix downgraded to Hold at Truist with stock 'fully valued'
• Equinix stock dips after Oppenheimer cuts to Perform on valuation, guidance
• Equinix: Take Advantage Of The AI Trend

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