Cyxtera Tech rises after CS bullish rating, M&A chatter

Cyxtera Technologies

07/04/2022 14:24

** Cyxtera Technologies  CYXT.O  shares up 6.5% at $13.30
premarket after data-center operator attracts new bull and
report it's considering selling itself
    ** Credit Suisse initiates CYXT at "outperform" and $15 PT,
implying ~20% upside to stock's Weds close
    ** CYXT's occupancy rate of 70.9%, well below peer data
center avg of 79.8%, is underappreciated considering recent
strengthening enterprise leasing dynamics seen industry-wide, CS
says
    ** If CYXT achieves 78% utilization target co has laid out,
CS estimates it could grow recurring revenues by 10% in its
current footprint, while EBITDA would likely grow even more
(~26%)
    ** Also, late Weds, Bloomberg reported CYXT is exploring a
potential sale among strategic options  urn:newsml:reuters.com:*:nL3N2W438Y
    ** Cowen in note said CYXT went public last year via SPAC
merger after a deal to be acquired fell through on valuation
disagreement
    ** CYXT owning just 2 of 61 data centers it operates limits
potential takeout multiple, Cowen says, and believes its $14 PT
reflects fair value
    ** CYXT's shares closed at $9.49 on their Jul 30 debut after
completing tie-up with Starboard Value Acquisition Corp

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))