Citi Analysts Revisit Their Investment Strategy On Crown Castle, Other Wireless Tower Stocks
While noting that tower stocks had rallied 9 percent over the past month and 15 percent year-to-date, Citi’s Michael Rollins said in a report that this was the right time to focus on buying the cheaper assets.
Analyst Michael Rollins expects domestic tower site leasing growth to continue to be in the 4-7 percent range over the next 12-months, “as carriers wait for activity to improve from AT&T, an eventual FirstNet deployment, & deployments of other spectrum bands.”
Rollins downgraded the rating on Crown Castle International Corp (NYSE: CCI) from Buy to Neutral, while raising the price target from $94 to $109. The stock has gained almost 26 percent y/y, while the dividend yield has declined to 3.5 percent, falling significantly below the average for the meg-cap telcos of 4.3 percent.
Recommended To Buy
The analyst maintained Buy ratings on American Tower Corp (NYSE: AMT) and SBA Communications Corporation (NASDAQ: SBAC). He raised the price target for American Tower from $121 to $134 and that for SBA Communications from $112 to $132.
The Citi report stated that both companies had “cheaper fundamental valuation metrics, while reinvesting a greater proportion of cash flow into their operations and/or shares.” Their valuations were at a discount of 16 percent, while they faced prospects for improved tower gross profit growth.
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Latest Ratings for CCI
|Sep 2016||SunTrust Robinson Humphrey||Initiates Coverage on||Buy|
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