Summary

  • Centuria Capital is raising A$300 million at A$2.00 per share to fund expansion of its ResetData data-center platform, drawing divergent analyst assessments on earnings dilution and capital requirements.
  • Jefferies analyst Andrew Dodds retained a buy rating and raised the price target 6.4% to A$2.66 per share while estimating the equity raise will reduce fiscal 2027 earnings by less than 1%.
  • Macquarie downgraded Centuria Capital to underperform from outperform, citing valuation concerns and estimating total capital requirements of A$1.35 billion for the data-center pipeline.
  • The Cleveland Fed found that banks’ indirect exposure to business loans originated by nonbank lenders represented 6.1% of all business loans in 2024, maintaining a 5% to 6% range over the prior two decades.
  • UBS projected Danske Bank second-quarter clean pre-tax income of 7.9 billion Danish kroner, up 4% on quarter and 8% on year, while reiterating a buy rating on the stock.

The proposed equity raise by Australian property manager Centuria Capital to fund its ResetData data-center expansion has produced sharply contrasting analyst reactions, reflecting broader uncertainty about the capital intensity of data-center investment amid accelerating demand for AI infrastructure.

Jefferies retained its buy recommendation, with analyst Andrew Dodds noting the company was taking advantage of a 31% rise in its share price over the preceding month. The firm estimated the capital raising would reduce fiscal 2027 earnings by less than 1%, though it cautioned that this calculation does not account for potentially higher returning reinvestment of proceeds through the 23MW pipeline and associated revenue/earnings acceleration. Jefferies raised its price target 6.4% to A$2.66 per share, compared with Centuria Capital’s last traded price of A$2.18.

Macquarie adopted the opposing stance, downgrading Centuria Capital to underperform from outperform. The firm’s analysis estimated capital cost at A$56 million per megawatt, implying total outlay of approximately A$1.35 billion across 24.1 megawatts. “Assuming vendor financing at 70% loan-to-value ratio implies equity required of circa A$400 million,” Macquarie stated, noting this exceeds the A$300 million being raised. Macquarie’s price target of A$1.88 per share sits well below the current trading level.

The analyst divergence reflects broader market uncertainty about data-center capital requirements. The sector faces questions about optimal financing structures as demand for AI infrastructure accelerates, with investors weighing immediate dilution against potential long-term returns.

Separately, Federal Reserve Bank of Cleveland economist Jan-Peter Siedlarek examined spillover risk from banks’ indirect funding of nonbank business lenders. Siedlarek estimated that 6.1% of all business loans in 2024 originated by nonbank lenders were indirectly funded by traditional banks, with this share remaining within the 5% to 6% range over the prior two decades. “This amount is small when viewed as a share of total business lending and does not compensate fully for the decline in direct bank balance sheet lending to the business sector in recent decades,” Siedlarek wrote, suggesting limited contagion risk but also inadequate offset of reduced bank direct lending.

In European banking developments, UBS analyst Johan Ekblom projected Danske Bank would report second-quarter clean pre-tax income of 7.9 billion Danish kroner, representing increases of 4% on the prior quarter and 8% on the prior year. Ekblom attributed positive revenue trends to net interest income, seasonal recovery in fees, and normalizing trading income. Operating expense growth was forecast at 3% year-over-year, with gradual credit loss normalization expected. “We expect a broadly stable net interest margin in the quarter, but see tailwinds building and benefiting both Q3 and Q4 compared to current levels,” Ekblom wrote. UBS raised its price target to 388 kroner from 386 kroner while reiterating its buy rating, though Danske Bank shares traded at 351.90 kroner, down 0.1%.

Analytical techniques used in this piece

This analysis applies the methods below. Each links to a short, plain-English explainer you can read and reuse.

Probabilistic Forecasting
Puts calibrated probabilities on what happens next.
Bayesian Reasoning
Starting from base rates and updating beliefs proportionally as evidence arrives.