Cowen Cuts Price Target on Crown Castle (CCI) Following 2Q15

Cowen reiterated an Outperform rating on Crown Castle (NYSE: CCI), and cut the price target to $91.00 (from $95.00), following 2Q15 results. Total revenue was $899.4MM vs. the Street's $932.7MM estimate. CCI raised its 2015 (mid-point) revenue outlook to $2.954B from $2.933B. AFFO per share was $1.03 vs. the Street’s $1.06 estimate.

Analyst Colby Synesael commented, "Crown posted good 2Q15 results and raised revenue, EBITDA, and AFFO by 0.7%, 1.3%, and 1.0% respectively (excluding CCAL) driven by $10MM from better acquired network churn (pushed out to 2016) and $5-10MM in increased walk-and-pay fees. The company also slightly increased its 2015 organic site rental rev. growth rate forecast to 5.4% from 5.0% or ~$5-10MM driven by new leasing activity of 6.0% vs. 5.6% previously as mgmt. noted increased tower demand being driven (still) by Verizon/T-Mobile. Mgmt. also noted that it believes it can grow AFFO >6% next year although we think this will ultimately (i.e. not necessarily when the company first provides guidance next quarter) prove low as our own checks suggest activity at AT&T/Sprint is picking up (not to mention the accretive nature of the Sunesys deal which is not in guidance but will close in 3Q15). It’s also worth noting that yesterday’s Extenet announcement positively validates Crown’s own investment in the space. As we think about the stock, we believe investors are beginning to shift the focus to 2016, and while management downplayed the 2016 activity impacts on yesterday’s call, the increased spending from AT&T and Sprint should provide the next catalyst for the stock. Valuation is still attractive considering the 3.9% dividend yield."

For an analyst ratings summary and ratings history on Crown Castle click here. For more ratings news on Crown Castle click here.

Shares of Crown Castle closed at $83.26 yesterday.

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