Collins Stewart Raises Price Target on American Tower (AMT), Sees 20% Dividend Growth Over Next 3-Years
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Price: $175.80 +0.05%
Rating Summary:
32 Buy, 8 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
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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Collins Stewart is maintaining its Buy rating on shares of American Tower (NYSE: AMT) and is increasing its price target from $65 to $70.
The firm forecasts each of the 2,500 towers, which are to be acquired in from Telefonica in Mexico will have one tenant each and could potentially account for 2-3 percent of the company's total revenue in 2012.
Collins Stewart believes AMT's dividend growth will top 20 percent annually over the next three years, even though they also anticipate management will use its large NOL balance, which is approximately $1 billion, to offset taxable income and limit dividend payout.
An analyst at Collins Stewart comments, "With organic cash flow generated by the business and with incremental EBITDA modestly levered at 3.5x, the company will have enough funding capacity to support both dividends and capex, while still leaving over $1 billion for acquisitions and some stock repurchase, based on our estimate. Despite the QRS and TRS organizational structure, we believe the company still has the much needed flexibility to move cash in between the two subsidiaries."
For FY11 and FY12, the firm is estimating EPS of $0.78 and $1.36. Total sales for the two years are expected to be $2.44 billion and $2.71 billion.
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 $58.80 yesterday.
The firm forecasts each of the 2,500 towers, which are to be acquired in from Telefonica in Mexico will have one tenant each and could potentially account for 2-3 percent of the company's total revenue in 2012.
Collins Stewart believes AMT's dividend growth will top 20 percent annually over the next three years, even though they also anticipate management will use its large NOL balance, which is approximately $1 billion, to offset taxable income and limit dividend payout.
An analyst at Collins Stewart comments, "With organic cash flow generated by the business and with incremental EBITDA modestly levered at 3.5x, the company will have enough funding capacity to support both dividends and capex, while still leaving over $1 billion for acquisitions and some stock repurchase, based on our estimate. Despite the QRS and TRS organizational structure, we believe the company still has the much needed flexibility to move cash in between the two subsidiaries."
For FY11 and FY12, the firm is estimating EPS of $0.78 and $1.36. Total sales for the two years are expected to be $2.44 billion and $2.71 billion.
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 $58.80 yesterday.
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