On Thursday, Citi reiterated its Buy rating on Equinix (NASDAQ:EQIX), with a price target of $1,020.00 amid recent concerns raised by Hindenburg Research. Hindenburg, on March 20, 2024, published a report on its website highlighting several issues with Equinix, including potential accounting irregularities related to the company's profit per share metric, AFFOPS, and risks to its core business.
The concerns extended to the company's capitalization of expenses and the way it presents maintenance capital expenditures.
Equinix has initiated an internal investigation to address the issues raised by Hindenburg. Citi has engaged with Equinix's Investor Relations team and conducted an independent review of the company's historical capital investment disclosures. Following this review, Citi has decided to maintain its Buy rating and the current price target for Equinix.
The analyst from Citi expressed continued support for Equinix's global retail-centric strategy, suggesting that the growth prospects for the company are still not fully appreciated by the market. The durability of this strategy is a key factor in the firm's positive outlook on Equinix.
Despite maintaining the Buy rating, the firm acknowledged that there are potential short-term challenges for Equinix. These include the slower sales growth forecasted for the first half of 2024, ongoing optimization efforts, and the lack of an immediate comprehensive response to the accounting and financial presentation concerns cited by Hindenburg.
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