NextDC shares rebound 7% from an 8-year low: Here's what brokers tip next

NextDC Ltd (ASX: NXT) shares have rebounded around 7% so far on Thursday, to $5.70 a piece.

Today's increase comes straight after the data centre operator's shares crashed 42% in a single day yesterday. The decline followed the company's latest market update.

NextDC told investors that there is a delay in delivering electricity to its M3 Melbourne data centre, which will then delay its ability to deliver and bill customers for contracted capacity. 

This forced management to substantially lower its FY27 guidance figures. Guidance for underlying EBITDA was lowered to between $245 million and $265 million. This is down from $385 million to $410 million previously. Net revenue guidance was lowered to between $475 million and $500 million, down from $615 million and $640 million. 

The update clearly spooked investors and many rushed to sell off their shares.

But now it looks like the storm has settled and many are questioning whether the selloff was worthy, or overdone.

Here's what the experts think.

Are NextDC shares a buy, sell, or hold now?

Prior to the announcement, the 12-month average price target among analysts was somewhere between the $19 and $20 range, with the majority holding a buy or strong buy rating.

However, some analysts have updated their outlook.

Market Index data shows that most analysts still rate NextDC shares a strong buy. The average target price has dropped to $17.79, although that still implies a potential 210% upside at the time of writing.

On TradingView, again the majority (13 out of 16) have retained their buy/strong buy rating on the shares. The remaining three have a hold rating on the stock.

The average target price has now dropped to $14.80. But again, that still implies an impressive 157% potential upside over the next 12 months, at the time of writing.

It looks like the maximum target price is still largely unchanged. At $34.45 the maximum forecast suggests a potential 500% upside for the shares.

Citi has maintained its buy rating and $21.15 target price on NextDC shares following the announcement yesterday and thinks there is more room for strong upside ahead.

The broker notes that NextDC's power update points to further earnings delays and FY27 guidance has been cut. It also notes that the revised guidance excludes potential service level credits. Citi thinks the final impact could be greater.

Citi also flags delays to M3 expansion approvals and further power upgrades, putting earnings beyond FY27 at risk. Customer termination rights and the potential effect of service credits on a debt covenant add uncertainty.

RBC Capital Markets is also unchanged, with an outperform rating and a $22 target price on NextDC shares. The broker said that the delays to power supply and development approvals were out of NextDC's control. But it said that it shows community concerns around data centre developments present a real risk to the timing of contracted capacity for data centre owners.

The post NextDC shares rebound 7% from an 8-year low: Here's what brokers tip next appeared first on The Motley Fool Australia.

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2026