American Tower seen as top U.S. tower pick as analysts turn more bullish

Investing.com -- American Tower is emerging as the preferred investment among U.S. wireless tower operators, with two Wall Street firms highlighting its stronger organic growth outlook, attractive valuation, and long-term exposure to data centers and AI-driven infrastructure.

The positive assessments come despite near-term headwinds from elevated carrier churn, higher interest rates, and uncertainty surrounding satellite-related investment themes, with analysts arguing that these challenges are already reflected in the stock's valuation.

RBC Capital Markets upgraded American Tower to Outperform from Sector Perform and raised its price target to $205 from $195, citing superior organic revenue growth relative to peers and improving prospects for its CoreSite data center business. The firm also described American Tower as its preferred tower company, expecting it to post the strongest U.S. net organic tower growth among major peers through fiscal 2026.

Separately, Goldman Sachs initiated coverage of the U.S. tower sector with a Buy rating on American Tower, while assigning Neutral ratings to Crown Castle and SBA Communications. The bank expects the U.S. tower industry to return to revenue growth above 3% after 2026 as elevated churn from Sprint and EchoStar-related disruptions fades and carrier network investments recover.

Goldman forecasts American Tower to deliver roughly 8% annual AFFO per share growth between 2026 and 2029, outpacing the 5-6% expected for its closest peers. The firm believes the company's international exposure and higher capital intensity have weighed excessively on its valuation, while its combination of tower assets and data centers provides additional upside from AI inference and edge computing demand.

The bank expects domestic organic growth across the tower industry to improve after a difficult 2026, when churn is expected to spike because of EchoStar lease defaults and earlier carrier consolidation. American Tower is projected to lead peers with domestic organic growth of 4-5% annually from 2027 through 2029, supported by network densification, spectrum deployment, fixed wireless expansion and future 6G investment.

RBC also expects international operations to benefit from favorable foreign exchange trends in the second quarter, while acknowledging that refinancing higher-cost debt will modestly increase interest expense. The firm raised its 2026 revenue forecast to $10.98 billion and adjusted EBITDA estimate to $7.28 billion, alongside a higher AFFO per share forecast of $11.07.

Both firms also see industry-wide opportunities for shareholder returns. RBC noted that American Tower still has significant buyback authorization available, while Goldman pointed to the company's comparatively conservative leverage as providing additional capital allocation flexibility.

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