Digital Realty Trust (NYSE:DLR) Undervalued say Barclays (NYSE:BCS)

At the current price of Digital Realty Trust (NYSE:DLR), Barclays (NYSE:BCS) sees them as a bargain.

Barclays noted, "DLR trades at 16.5x our 2011E CAD, a 19% discount to the wider REIT universe, and at an implied nominal cap rate of 7.4%, a 90 basis point discount to the REIT average of 6.5%. We continue to believe that the stock offers a compelling value at its current price, trading at a discount to the group despite better earnings growth prospects. That said, we are reducing our 12-month price target by $1 to $71 per share (was $72), which reflects a slightly higher assumed cost of equity in future years. Our revised target of $71 implies a 22.2x multiple of our 2011E CAD of $3.20 (was 22.5x $3.21). Specifically, our price target is based on a DCF of $75.54 (70%), an NAV of $58.15 (10%), and a sentiment/regression value of $63.09 (20%)."

Barclays maintains an "Overweight' on Digital Realty Trust, which closed Monday at $52.95, up $0.22, or 0.41 percent.