NextDC Unconcerned by Higher Capex Guidance

Dow Jones08:52

0052 GMT - NextDC's bull at Morgan Stanley sees no cause for concern in the Australian data-center operator's higher-than-expected capital-expenditure guidance. Analyst Andrew McLeod says NextDC's expectation of A$5.5 billion in FY 2027 capex is about 10% higher than he had previously forecast, but he tells clients in a note that he sees multiple funding routes the company could follow. In any case, McLeod points out that the expenditure is driven by higher demand and a strong development pipeline. About 74% of NextDC's forward order book should become billable within two years, he adds. MS keeps an overweight recommendation on the stock and raises its target price 5.6% to 19.00 Australian dollars. Shares are down 1.7% at A$13.64.

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