Canaccord Genuity Morning Coffee on AMT, CCI, and SBAC: Trouble for towers?
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Up: 8 | Down: 5 | New: 26
Rating Summary:
32 Buy, 8 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffee on American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), and SBA (Nasdaq: SBAC): Trouble for towers?
Canaccord analyst said, "News of AT&T’s (NYSE: T) proposed deal to purchase T-Mobile sent shares of telecom tower companies dramatically lower on worries that consolidation will put a dint in demand for telecom infrastructure. Shares of American Tower and smaller rivals Crown Castle International and SBA Communications all slid as Wells Fargo estimates the deal will reduce annual revenue growth by 8-9%. The brokerage believes that American Tower will see the least impact of the three due to its larger international exposure. The merger will not impact short term revenue for the companies as they would have existing lease agreements in place, which Raymond James estimates have approximately 5-10 years remaining before expiration. However, the brokerage believes it will hurt revenue growth as the merger will likely eliminate the 4G network T-Mobile was planning to build, as it will likely share a 4G network with AT&T. They also believe this may set the stage for additional consolidation on the wireless space which could further damage growth potential for tower companies. While some analysts see the deal as a negative, others believe the recent weakness has created an attractive entry point for investors, expecting that wireless providers will continue to enter in to new lease agreements as they attempt to expand their capacity."
Canaccord analyst said, "News of AT&T’s (NYSE: T) proposed deal to purchase T-Mobile sent shares of telecom tower companies dramatically lower on worries that consolidation will put a dint in demand for telecom infrastructure. Shares of American Tower and smaller rivals Crown Castle International and SBA Communications all slid as Wells Fargo estimates the deal will reduce annual revenue growth by 8-9%. The brokerage believes that American Tower will see the least impact of the three due to its larger international exposure. The merger will not impact short term revenue for the companies as they would have existing lease agreements in place, which Raymond James estimates have approximately 5-10 years remaining before expiration. However, the brokerage believes it will hurt revenue growth as the merger will likely eliminate the 4G network T-Mobile was planning to build, as it will likely share a 4G network with AT&T. They also believe this may set the stage for additional consolidation on the wireless space which could further damage growth potential for tower companies. While some analysts see the deal as a negative, others believe the recent weakness has created an attractive entry point for investors, expecting that wireless providers will continue to enter in to new lease agreements as they attempt to expand their capacity."
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