Digital Realty Trust enters the first week of August consolidating its post-earnings surge, with the analyst upgrade cycle still running and options sentiment quietly shifting more bullish than at any point in recent months.
The most notable move this week came from Argus Research, which upgraded DLR to Buy on August 5 — announcing a fresh $212 target — following Truist's decision to trim its target modestly from $225 to $220 while keeping Buy, and Cantor Fitzgerald's raise to $221 from $211. These are the trailing echoes of the Q2 earnings reaction documented in the previous note: a cluster of upgrades and target lifts that began on July 24 and has continued into early August. The consensus picture is lopsided — 22 buys against just 6 holds, with no sells — and mean target now around $220, implying roughly 13% upside from the current $193.89. Barclays remains the lone dissenter at Equal-Weight with a $197 target, now essentially at-the-money after the stock's 12% gain over the past month. The Street has largely repriced, but the gap between current price and consensus target is narrower than it looked two weeks ago.
Options positioning tells a more interesting story than short interest right now. The put/call ratio has fallen to 1.77 — about 1.3 standard deviations below its 20-day mean of 2.02 — and is close to its 52-week low of 1.41. That's a meaningful shift. Two weeks ago the PCR was running above 2.2, and as recently as late July it sat near 2.5. The drift lower points to call activity picking up relative to puts, consistent with investors adding upside exposure rather than hedging into weakness. For a REIT that spent much of the year with a structurally elevated PCR, this is a notable change in tone.
Short interest barely registers as a factor here. At 2.4% of the free float, it drifted down 2% on the week and has been range-bound around 8 million shares for the past six weeks, never breaking decisively in either direction. Borrow costs are negligible at 0.39%, and availability is effectively unlimited — roughly 225 million shares sit available to lend against only 8 million shorted. The short score of 32.9 is low and has been edging slightly lower over the past ten days. There is no meaningful bearish positioning in the lending market to unwind.
The factor picture reinforces the bullish analyst skew. The analyst recommendation factor ranks in the 99th percentile of the universe — an extreme reading, reflecting the lopsided buy consensus. EPS momentum over 30 days ranks in the 90th percentile, and EPS surprise ranks 87th, consistent with the Q2 beat. The EV/EBITDA multiple has contracted about 1.2 turns over the past month to 21.9x — the rally has run slightly ahead of earnings upgrades, but the compression is modest. Longer-term value metrics remain stretched: a P/E near 61x reflects the premium the market places on data center REITs with visible AI-driven demand pipelines. The bull case — near-record backlog, continued large signings, pricing power in scarce markets — is well supported by the data. The bear case centres on interest rate sensitivity and customer concentration, neither of which is currently moving against DLR.
Closest peer EQIX added 1.6% on the week, largely in step with DLR's 0.4% move, while broader REIT peers including PSA and CUBE each lost more than 1% — the data center premium over conventional real estate remains intact. With no next earnings date yet set and the upgrade cycle appearing to slow after its peak burst in late July, the stock's next directional signal will likely come from either a macro rate move or the first concrete disclosure of 2027 leasing activity.
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