NextDC's result was ahead of Morgans' forecasts, and included a small upgrade to FY guidance. Capex guidance was increased by 8% but this bodes well for future growth, the broker suggests.

The company typically builds only what it knows will be leased, including recently announced generation 4 and 5 sites at big-city edges and regional centres.

NextDC remains the broker's preferred pick given substantial structural growth, quality management, significant barrier to entry and, in the broker's view, an improving competitive advantage with regional/edge sites. Add and $14.64 target retained.

Sector: Software & Services.

Target price is $14.64.Current Price is $10.55. Difference: $4.09 - (brackets indicate current price is over target). If NXT meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2022 Acquisdata Pty Ltd., source FN Arena