Target Hospitality could be an under-the-radar beneficiary of data center expansion, according to Stifel. Stifel upgraded the temporary workforce housing stock to buy from hold in a Monday note, raising its price target to $11 per share from $7.50. The investment bank’s forecast implies more than 36% upside from Monday’s $8.05 close. The stock is 7% higher in reaction on Tuesday, but remains 11% lower on the year. Before the market opened Monday, Target said it signed a “multi-year contract” to construct and provide “comprehensive facility services and hospitality solutions supporting the development of a regional data center campus” somewhere in the Southwest. It didn’t identify the client or the location. Analyst Stephen Gengaro called Target Hospitality a “back door data center play,” saying the company can provide lodging for data center customers, possibly amounting to as many as 5,000 rooms, over the coming years. TH YTD mountain Target Hospitality stock in 2025. “TH’s core capabilities providing turnkey accommodations, logistical services, and culinary offerings position it very well to capitalize on the rising need for housing around data centers,” the analyst said. “While difficult to quantify, we believe this multi-year growth opportunity is very large and TH has several opportunities in the pipeline.” “TH’s diverse exposure to both the oil & gas sector and Government business provides exposure to two diverse end markets,” Stifel said. “In the near-term, uncertainty around the Government segment remains a headwind but rising acceleration in its data center initiatives may be a strong tailwind.”
