UPDATE: Oppenheimer Upgrades Crown Castle (CCI) to Outperform
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(Updated - September 6, 2016 9:21 AM EDT)
Oppenheimer upgraded Crown Castle (NYSE: CCI) from Perform to Outperform with a price target of $109. Analyst Timothy Horan thinks the company is well positioned to benefit from data traffic trends.
"We expect mobile data traffic to grow 10x in the next six years. The carriers are encouraging this growth through higher data bucket plans. This growth should drive cell site equivalent locations by 25%-50%, with a third of this through small cell on which CCI is focused. Macro towers are also set to benefit from new spectrum builds —AWS-3, FirstNet, Dish, 600 MHz. CCI is only at two tenants per tower, growing at 0.1 annually, which will drive EBITDA margins up 100 bps per year for the next decade. Finally, the S&P GICS code for REITs is a strong catalyst as CCI is a less risky, domestic play with a 4% yield (vs. 3.5% for REITs) growing dividends 50% faster than traditional REITs," said Horan.
The analyst added, "With near-term catalysts and stable rates, CCI offers investors unique exposure to secular growth in data consumption and small cells. CCI's dividend is 4%, growing 8% per year."
Shares of Crown Castle closed at $96.06 yesterday.
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