American Tower (AMT) Strikes Deal that may Backfire - Macquarie

Macquarie Securities believes that American Tower (NYSE: AMT) paid over 24x TCF for the Verizon (NYSE: VZ) tower assets, which they consider a multiple too rich for a 2.4% blended escalator business. As a result the firm cut its price target from $106 to $102.

Analyst Kevin Smithen says, "We estimate that the deal is $0.29 accretive on AFFO/share in 2016. However, we have slightly reduced our long-term US leasing rental growth assumptions and this reduces our DCF-based TP by $4. We remain concerned about 2015 AFFO guidance later this month. We were at $4.96 for 2015 before VZ. We think AMT needs to print a few qtrs. of strong execution on pending deals before the shares can move higher."

The firm maintained a Neutral rating on the stock.

For an analyst ratings summary and ratings history on American Tower click here. For more ratings news on American Tower click here.

Shares of American Tower closed at $96.70 yesterday.

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