Jefferies Financial Group (NYSE: $JEF) has initiated coverage of Hut 8 (NASDAQ: $HUT) stock with a buy rating and a price target of $156 U.S.
The price target issued by Jefferies is 40% higher than where HUT stock currently trades.
Analysts at Jefferies, a Wall Street investment bank, cited Hut 8’s two artificial intelligence (A.I.) data centre leases as key to its bullish outlook on the stock.
Jefferies said the lease structure is among the most credit-enhanced in the sector. The firm adds that Hut 8 is experienced at managing power generation and digital infrastructure assets.
The analysts add that the River Bend project represents a proof point for the company and should transform Hut 8 from a Bitcoin (CRYPTO: $BTC) miner into a data centre operator.
The positive note from Jefferies comes after Hut 8 posted 115% revenue growth over the last 12 months.
While Hut 8 reported an earnings miss for this year’s first quarter, there are continued signs of operational growth at the company, said Jefferies in its assessment of the Canadian firm.
HUT stock has gained 572% over the past 12 months to trade at $108.32 U.S. per share.
