Robert Gutman, analyst with Guggenheim, is maintaining a positive outlook for the tower space broadly, and expects key items in the upcoming Q3 releases to be (1) CCI’s initial 2019 outlook; (2) an update from AMT on the negotiations for the exit of a large customer in India, and (3) a discussion of the pace of acceleration that SBAC is seeing in domestic leasing and implications going forward. Guggenheim is lowering their SBAC PT (price target) to $180 from $185.
“We believe all three tower operators are seeing increasing activity through the year,” Gutman said, “as carriers spend on network densification, upgrading equipment to support new spectrum bands (2.5 GHz, 600GHz), preparation for 5G capability (e.g., massive MIMO antennas), and FirstNet gathers momentum.”
Against this backdrop, Gutman believes AMT is seeing the highest net organic growth domestically (18E 7.0%), followed by CCI (18E. 5.6%), and SBAC (18E 4.9%) – while internationally SBAC leads (18E 9.0%) – as AMT absorbs churn headwinds driven by carrier consolidation in India (18E 2.0%).
October 16, 2018