Morgans assesses NextDC’s earnings are not materially exposed to higher spot energy prices, given energy rates are typically contracted annually.
The analyst also estimates around 80% of FY23 power costs will be passed on to wholesale customers, with the balance reviewed every year at the greater of CPI or 2.5%.
The Add rating is retained while the target falls to $13.01 from $14.64 as the broker utilises a higher risk free rate in its financial modelling.
Sector: Software & Services.
Target price is $13.01.Current Price is $10.09. Difference: $2.92 – (brackets indicate current price is over target). If NXT meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
