UPDATE: JPMorgan Upgrades SBA Communications (SBAC) to Overweight
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(Updated - November 30, 2016 11:09 AM EST)
JPMorgan upgraded SBA Communications (NASDAQ: SBAC) from Neutral to Overweight with a price target of $130. The upgrade followed meetings with management that reinforced analyst Philip Cusick's bullish thesis.
"We have been warming up on SBAC for some time and today are upgrading from Neutral to Overweight based on its recent sell-off, significant discount to peers, and what we believe is a fully priced risk of US wireless consolidation. Since our 5/2/16 SBAC is off 5.1% compared to up 1.5% for AMT and down 0.6% for CCI (including dividends), while the SPX is up 7.3% and the RMZ is off 0.6% (including dividends)," said Cusick.
The analyst added, "While we still see headwinds for towers in the next year including rising rates and a potential Sprint/T-Mobile merger, we believe these risks are already priced at SBAC trading at 15.1x 2017 AFFO vs 16.6x for AMT and 17.1x for CCI. We expect revenue growth at SBAC to pick up in 2017 and more in 2018 as churn falls away, with potentially even more 2018 acceleration if deployment of AWS, WCS, 600 MHz, and FirstNet spectrum ramp overall gross activity levels including spending by AT&T. Our price target is $130 vs Tuesday’s $99.81close."
Shares of SBA Communications closed at $99.81 yesterday.
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