Digital Realty Trust DLR is slated to report second-quarter 2026 results on July 23, after the closing bell. The quarterly results are expected to reflect year-over-year growth in both revenues and funds from operations (FFO) per share.
This Austin, TX-based data center real estate investment trust (REIT) reported a core FFO per share of $2.04 in the prior quarter, surpassing the Zacks Consensus Estimate of $1.94. Results reflected steady leasing momentum amid rising AI demand.
Over the trailing four quarters, Digital Realty’s core FFO per share topped the Zacks Consensus Estimate on all occasions, with the average beat being 5.11%. This is depicted in the chart below:
Digital Realty Trust, Inc. Price and EPS Surprise
Digital Realty Trust, Inc. price-eps-surprise | Digital Realty Trust, Inc. Quote
Factors at Play and Projections for DLR
Digital Realty is expected to sustain healthy growth in the second quarter of 2026, supported by strong leasing, a record backlog and rising demand for AI- and cloud-related data center capacity.
Revenues should benefit from $544 million of lease commencements scheduled through 2026, along with positive renewal spreads of 6.5%-8.5% and a projected 50-100 basis point improvement in occupancy.
Near-term earnings may have softened in the second quarter due to higher operating costs, development spending and capital recycling, before improving later in the year.
For the second quarter, the Zacks Consensus Estimate for rental revenues is pegged at $1.12 billion, up 12.1% from $1 billion reported in the year-ago quarter. The Zacks Consensus Estimate for interconnection & other revenues currently stands at $126.8 million, indicating a 3.9% increase from the year-ago quarter.
The consensus estimate for quarterly total revenues is pegged at $1.66 billion, calling for an 11.4% year-over-year jump.
Digital Realty’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the company’s quarterly FFO per share has remained unchanged at $1.98 over the past two months. However, the figure indicates year-over-year growth of 5.9%.
What Our Quantitative Model Predicts for DLR
Our proven model predicts a surprise in terms of FFO per share for Digital Realty this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.
Digital Realty currently has an Earnings ESP of +2.30% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector, SL Green Realty SLG and Cousins Properties CUZ, you may want to consider, as our model shows that these also have the right combination of elements to report an FFO beat this quarter.
SL Green is slated to report quarterly numbers on July 22. SLG has an Earnings ESP of +7.20% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cousins is slated to report quarterly numbers on July 30. CUZ has an Earnings ESP of +0.45% and carries a Zacks Rank of 3 at present.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Digital Realty Trust, Inc. (DLR): Free Stock Analysis Report
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SL Green Realty Corporation (SLG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).