Uniti Group (UNIT) PT Raised to $11 at Morgan Stanley Ahead of Expected Pickup in M&A

Morgan Stanley analyst Simon Flannery raised the price target on Uniti Group (NASDAQ: UNIT) to $11.00 (from $9.50) noting that in 2021, the company improved its balance sheet, pushing out maturities by several years.

The analyst reiterated an Overweight rating, stating "As we move into 2022, our focus areas are largely the same as they have been for the last several quarters and we'll be paying attention to the company's ability to drive lease-up on existing assets and their ability to execute on their sales / M&A pipeline." He went on to comment "M&A execution still to come. Since Windstream's emergence from bankruptcy, it has been relatively quiet on the M&A front, with Uniti announcing the transaction with Everstream back in November 2020 and recently announcing a long-haul dark fiber agreement with an international internet provider (although terms were not disclosed). The company has focused their M&A efforts on three categories, bolt-on acquisitions, sale leaseback asset sales and large transformative transactions but the company has maintained they are taking a disciplined approach (looking for attractive multiples) and will not do deals just for the sake of doing deals. The company seems to be evaluating more strategic options for their assets, recently noting "we're spending time with our Board evaluating and refining analysis that would allow us to separate our assets in a tax and value efficient manner" and that "we've consistently said in the past year that we have a very strategic set of assets and that we are evaluating large transformative transactions."

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