Crown Castle International CCI reported strong fourth-quarter results Wednesday, backed by an ongoing high level of spending by all four major wireless carriers in the U.S., according to Guggenheim.
The Analyst
Guggenheim’s Robert Gutman maintains a Buy rating on Crown Castle with an unchanged $120 price target.
The Thesis
Crown Castle’s net organic growth for the year was in-line with expectations, Gutman said in a Friday note.
A minor increase in small-cell bookings at year-end resulted in full-year leasing of $58 million versus the estimate of $55 million, the analyst said.
The 2019 outlook seems solid, with revenue, EBITDA, AFFO and AFFO per share growth of 5.2 percent, 7.2 percent, 7.1 percent and 6.6 percent, respectively, Gutman said. Organic growth should accelerate to 6 percent, he said.
Notably, the company deployed 7,000 small-cell nodes in 2018 and is targeting 10,000-15,000 in 2019, according to Guggenheim.
The small-cell backlog stands at 35,000 nodes, and while this segment’s development has warranted increasing capex, management indicated that this would be “comfortably financed with debt,” Gutman said.
Crown Castle is well-positioned, with carriers increasing their spending on their path to 5G and mobile data traffic expected to grow, according to Guggenheim.
Price Action
Crown Castle shares were trading 1.3-percent higher at $113.37 at the time of publication Friday.
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