Cogent Communications Downgrade to Neutral Following Definitive Agreement to Sell Data Centers to I Squared Capital

Research evidence excerpt

Cogent Communications Downgrade to Neutral Following Definitive Agreement to Sell Data Centers to I Squared Capital

J P M O R G A N North America Equity Research

28 May 2026

Cogent Communications ▼Neutral

Previous: Overweight

Downgrade to Neutral Following Definitive Agreement CCOI, CCOI US

Price (27 May 26):$21.62

to Sell Data Centers to I Squared Capital Price Target (Dec-26):$22.00

Following Cogent's announcement of a definitive agreement to sell 10 data centers Telecom Services, Cable & Satellite

to I Squared Capital for $225M in cash on May 26th (expected to close on or after AC Sebastiano C Petti

June 12, 2026, pending HSR clearance), we are downgrading Cogent shares to (1-212) 622-8529

Neutral (from Overweight) while maintaining our December 2026 price target of sebastiano.c.petti@jpmorgan.com

$22. With the data center sale catalyst now behind us, which we discussed in our Shayna Nguyen

May 5th update and delivered a 21% appreciation in Cogent shares vs. +5% for the (1-212) 622-0038

S&P 500, focus will shift back to Cogent's core operating trends and further shayna.nguyen@jpmchase.com

balance sheet repair and deleveraging. Cogent CEO Dave Schaeffer expects de John Stid

minimis taxes related to the deal, and as a result, we expect net leverage (reported (1-212) 272-0992

net debt over trailing twelve months adj. EBITDA including T-Mobile payments) john.stid@jpmorgan.com

J.P. Morgan Securities LLC

to decline to 6.6x exiting 2026 from 7.4x exiting 1Q26, assuming a mid-year close.

This is consistent with commentary from our fireside chat with Schaeffer at the J.P.

Morgan TMC Conference, where he characterized the data center sale as a material Key Changes (FYE Dec)

step in closing the gap between current net leverage of 6.7x and Cogent's 4.0x Prev Cur Δ

target.