Morgan Stanley judges NextDC’s announced $350m expansion of a debt facility as further evidence of the company’s ability to attract capital. This is considered one of the drivers of out-performance over recent years, along with an ability to deploy that capital at attractive rates of return.
In terms of the latter, the broker sees the next major catalyst (outside of a major contract) is planning approvals on M3. This will allow the company to commence the building capex program, in the analyst’s view.
Overweight retained. Target is unchanged at $14.60. Industry view is In-Line.
Sector: Software & Services.
Target price is $14.60.Current Price is $12.10. Difference: $2.50 – (brackets indicate current price is over target). If NXT meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).