UPDATE: American Tower (AMT) AT&T Deal Triggers 2019 Revenue Increase, PT to $240 at Citi

Citi analyst Michael Rollins raised the price target on American Tower (NYSE: AMT) to $240.00 (from $236.00) after AT&T disclosed a new master lease agreement (MLA) structured for mutual growth through a simplified leasing process and expanded site development services.

The analyst stated "We understand the deal doesn’t explicitly extend the average contact length, but the minimum contractual spend coupled with visibility on anticipated churn triggered a non-cash increase to 2019 straight-line revenue of $135 million for the back-half of the year. While there is apt to be give-and-take on both sides of the agreement, we are not expecting a change in AMT’s average rent escalation while we believe the deal reaffirms the opportunity for AMT to increase cash rents from AT&T over the next few years, as implied by the bump in straight-line revenue amortization". No change to the Neutral rating.

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