** Digital Realty's DLR.N shares up 0.7% at $180.84, after rising as high as $184.64 early Tues, after UBS upgrades data center operator to 'buy' from 'neutral'

** UBS hikes PT from $147 to $205, implying 14% upside to stock's last close

** Outlook driven by stronger renewal spreads, higher yields on new developments and continuation of the bookings strength realized in 2024 as artificial intelligence and overall hyperscale demand remain elevated, UBS writes in note

** DLR to benefit from improved negotiating leverage in new supply/demand environment, evidenced by package deals last year to pull forward renewals in exchange for new capacity, UBS says

** New PT based on equal blend of 26x/28x 2026 estimated EBITDA and AFFO/sh, UBS says, adding that's near the high-end of the historical range but justified given co's accelerating growth profile

** Now, of 26 analysts covering DLR, recommendation breakdown is 16 "strong buy" or "buy", 9 "hold" and 1 "sell", per LSEG

** Median PT of $201 up from $185 a month ago and from $164.50 on Oct 7

** In 2024, DLR shares gained ~32%, well outperforming S&P 500 real estate sector's .SPLRCR 1.7% advance and S&P 500's.SPX 23% rise

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))