American Tower Downgraded Ahead Of Earnings

American Tower Corp AMT reports its second-quarter earnings July 31, but it may not be anything to phone home about.

The Rating

Guggenheim analyst Robert Gutman downgraded American Tower to Neutral and cut his price target from $156 to $154.

The Thesis

American Tower is expected to profit long-term from its innovation initiatives as well as the Federal Communication Commission’s push for spectrum expansion.

At the same time, Gutman forecasts improvements in domestic performance and 2018 year-over-year growth as the nation’s four major carriers ramp spending. Larger equipment deployments should drive organic growth.

“Though we believe the company is well positioned longterm, we think investor sentiment will be weighed down near-term pending the outcome of negotiations with an exiting customer in India, while FX presents an increasing headwind to prior estimates,” the analyst wrote in a Tuesday note.

Tata Teleservices’ pullout from India, American’s Indian property, and its 26-percent stake in ATC India are seen to compound consolidation churn. Meanwhile, progress in Europe, the Middle East, Africa and Latin America may be partially offset by near-term currency headwinds.

Price Action

At time of publication, shares were trading down marginally at a rate of $141.39.

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