from citi-group
EQIX: New Analysis Shows Upside Potential to '08 Revenue Guidance and Consensus; Reiterate Buy as Small Cap Top Pick
Asia Offers Upside to 2Q Consensus and Guidance - We are raising our near-term operating forecasts to reflect incremental strength, principally from Asia, based on our revised bottoms-up revenue analysis, supporting upside potential to FY08 revenue guidance and the '09 revenue consensus. Our 2Q revenue forecast increases to $170.8 mil., while our bottoms-up revenue analysis still implies further upside potential to our forecast by up to another $1.6 million.
Expect Strong Demand to Be Emphasized in NYC Metro, DC & London - We expect favorable demand trends to be emphasized on its 2Q call set for 7/23, as we expect EQIX to remain bullish on trends in DC; formally announce the build out of Secaucus phase II, which is already built into our capex forecasts, with the possibility of Phase I being sold-out before the new expansion comes on-line; and strong demand in London, which may facilitate another expansion.
European Bookings Remain Well Ahead of Billing - We are encouraged on the potential upside from its European portfolio contribution as booking levels were at 87% exiting 4Q, while we believe revenue billings as of 1Q were only around 53%, and we believe both demand and pricing trends remain favorable.
Reit. Buy on EQIX - We recommend Buying EQIX with a target price of $120 on the recent pull-back, as our revised bottoms-up revenue analysis suggests room for further upside potential to our upwardly revised forecasts that are above FY08 revenue guidance and consensus 2008 - 2010.