Target Hospitality Rallies 9% After Stifel Upgrade On Multi-Year Deal For Data Center Campus Support: Retail’s Not Convinced

Stifel raised its price target on Target Hospitality to $11 from $7.50, and noted that it assumes the company will operate 5,000 rooms for data center customers and 3,400 for government services over the next few years.

Target Hospitality (TH) shares jumped 9% in early trading after the stock received an upgrade from Stifel to ‘Buy’ from ‘Hold’ following a multi-year lease and services agreement to construct and provide facility services and hospitality solutions supporting the development of a regional data center campus located in the Southwestern United States.

Retail sentiment on the stock was in the ‘neutral’ territory, compared with ‘bullish’ a day ago, with chatter at ‘normal’ levels, according to data from Stocktwits.

Stifel also raised its price target on Target Hospitality to $11, up from $7.50, according to TheFly. The firm assumes the company will operate 5,000 rooms for data center customers and 3,400 for government services over the next few years.

Target Hospitality said it will construct and provide full turnkey support for the data center community, including premium culinary offerings, facilities management, and comprehensive support services. 

The purpose-built and highly customized community will support an initial population of 250 individuals, with the capability to expand to about 1,500 individuals, the company said, adding that it anticipates first occupancy by late 2025.

The contract, which has an initial term through September 2027, is expected to generate nearly $43 million of committed minimum revenue over its initial term, and Target Hospitality expects about $5 million of revenue will be realized in 2025.

Shares of Target Hospitality were down nearly 10% so far this year and declined 9% in the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<