Deutsche Bank on Tower Operators: Potential Impact of Two Near-Term Headline Risks

Deutsche Bank on Tower Operators: Potential Impact of Two Near-Term Headline Risks

Analyst, Brett Feldman, noted key risks as carrier consolidation and weaker credit.

Feldman said, "...we discuss the potential impact to tower stocks if we see another wave of carrier consolidation or if we see deterioration in credit markets. Both factors have historically been key drivers of weakness in towers, but our conclusions on what to do if we see either again are quite different. In short, any pressure from carrier consolidation is likely a buying opportunity whereas increases in credit spreads may put material and sustained pressure on the group. In both cases, American Tower (NYSE: AMT) seems least at risk (more diversified revenue base, less leverage). But, SBA Communications (Nasdaq: SBAC) remains our top pick due to its industry-leading AFFO/shr growth and sector-low '12E AFFO multiple (17.6x vs. 22.4x for AMT)."

Deutsche Bank maintains a 'Buy' rating on Crown Castle (NYSE: CCI), American Tower (NYSE: AMT) and SBA Comm (Nasdaq: SBAC)

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