Macquarie Downgrades American Tower (AMT) to Neutral

Macquarie downgraded American Tower (NYSE: AMT) from Outperform to Neutral with a price target of $106 saying fears of slowing U.S. growth in 2016 appear to be playing out.

Analyst Kevin Smithen comments, "We have spent the past few days checking in with carriers, network integrators, private tower company managements and tower financial sponsors to try and reconcile CCI’s sluggish long-term growth forecasts with bullish thematic commentary by AMT. In summary, our conversations suggest a 100-150bps slowdown in industry US site leasing revenue growth in ‘16 as AT&T, Sprint and T-Mo reduce aggregate wireless capex and decommission Leap, Clearwire and Metro sites, respectively. While we still anticipate a healthy 6.4% US organic growth rate for AMT in ’16, we believe the deceleration from 9.5% reported organic US growth in ’14 (8.5% excl. Sprint ‘pay and walks’), and 7.5% in ’15 is likely to result in some multiple compression. While we regard AMT’s mgmt. team and business model very highly, we are moving to the sideline on the shares until we feel that both buyside and sellside expectations reflect slowing growth in ’16. Our TP actually increases slightly to $106, but the 10% total expected return is not enough to merit an OP rating, in our view."

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 $97.50 yesterday.

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