Kepler cuts Merlin Properties target on data center value concerns
Analysts at Kepler downgrade Merlin Properties to hold from buy, citing slower-than-expected returns from data center assets.
Kepler has downgraded its rating on Merlin Properties to hold from buy, citing disappointment in value creation from the real estate investment trust’s data center portfolio.
The brokerage cited slower-than-anticipated returns from the company’s data center assets, which have underperformed relative to expectations. Merlin Properties, which operates in Ireland and Europe, has expanded into data center development to capitalize on growing demand for digital infrastructure.
Kepler’s decision follows a reassessment of the sector’s growth trajectory and the company’s ability to generate returns from its data center investments. The downgrade reflects concerns over execution risks and the timing of value realization in the segment.
Merlin Properties did not immediately respond to a request for comment. The company’s shares were trading lower in early European trading on Thursday.
Priya covers listed equities and corporate earnings, reading quarterly results and guidance for what they signal about sector health and forward valuations.
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