Macquarie Upgrades American Tower (AMT) to Outperform

Macquarie upgraded American Tower (NYSE: AMT) from Neutral to Outperform with a price target of $107.00 (from $102.00), saying shares are compelling again after a period of relative underperformance.

Analyst Kevin Smithen commented, "We believe that AMT’s mgmt. will slow down the pace of global M&A over the next 12-18 months and focus on VZ tower lease-ups and a potential public safety opportunity in 2H16, despite a plethora of assets reportedly for sale in Europe, India, Africa and LatAm. In our view, tower stocks perform the best when there is no M&A and the companies can naturally deleverage and return excess cash to shareholders."

He continued, "With AMT shares underperforming the RMZ index by 16% since 3Q14, and CCI, SBAC and the S&P500 by 6% each, we sense growing frustration with AMT amongst investors. While we have been vocal about our concerns over the VZ deal math, FX, slower US carrier spending and AMT’s macro forecasting (especially in BZ), we believe the current 16.7x ’16 P/AFFO already discounts these headwinds. While we are not expecting a 30-40% tower rally as in past years, we do think investors can generate a 15% total return on AMT shares with limited downside risk. If LatAm sentiment or FX begin to improve, we could see ~10% upside to our new $107 TP, with Sprint’s capex plans and PCIA as near-term catalysts."

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 $94.50 yesterday.

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