Dec. 2, 2014, 10:53 AM
- Raymond James has downgraded American Tower (AMT -2.5%) to Outperform from Strong Buy, and Crown Castle (CCI -2.3%) to Market Perform from Outperform. Peer SBA (SBAC -2.2%) is off in sympathy.
- AMT and SBAC have rallied strongly this year; CCI has seen more moderate gains.
- A month ago: Goldman, Macquarie downgrade AMT; CCI receives upgrade and downgrades
Oct. 31, 2014, 6:17 PM
- Morgan Stanley's Simon Flannery: "Crown Castle (CCI -6.2%) now offers a ~4% dividend yield, based on [Thursday's] closing price, compared to the REITs, which yield between 3.3% and 3.9%. We continue to see upside, as the stock attracts income oriented investors."
- Though it just more than doubled its payout following pressure from activist Corvex Management, Crown Castle still expects to grow its dividend at a rate on par with its AFFO growth; the tower owner is aiming for 6%-7% growth on an organic basis.
- Shares sold off due to disappointment with CCI's 2015 outlook: The company expects AFFO/share of $4.31-$4.37, below a $4.75 consensus. Site rental revenue is expected to rise to $3.047B-$3.067B from a 2014 level of $3.001B-$3.006B.
Oct. 30, 2014, 1:39 PM
- Though it missed Q3 EPS estimates (while beating on revenue), American Tower (NYSE:AMT) is hiking its full-year AFFO guidance to $1.8B-$1.82B from $1.755B-$1.795B.
- Also, AMT now respectively forecasts U.S. and international organic core revenue growth of 9.5% and 16%; prior guidance was for 9%+ and "nearly 15%" growth.
- Rental/management revenue guidance has been narrowed to $3.975B-$4.005B from $3.945B-$4.015B, and net income guidance lowered to $805M-$825M from $830M-$850M.
- Q3 AFFO rose 25.2% Y/Y to $460M ($1.15/share, well above EPS of $0.50).
- U.S. rental/management revenue +25.2% to $664M (+9.1% organic); international revenue +30.3% to $348M (+17.7% organic). Network development services revenue more than doubled to $27.1M.
- Rental/management op. margin slipped to 67% from 69% a year ago. AMT ended Q3 with $13.6B in net debt, and a 5.1x net leverage ratio.
- SBA (SBAC +1.4%) and Crown Castle (CCI +0.8%) are up moderately.
- Q3 results, PR
Oct. 14, 2014, 9:23 AM
- Activist investor Corvex Management has disclosed a $1B (nearly 4%) stake in Crown Castle (NYSE:CCI), and is calling on the tower owner to either start paying over $4/share in quarterly dividends next year (Option #1), or over $1.60/share in dividends combined with ongoing buybacks (Option #2).
- The first option would require a steep 80%+ payout ratio, but maintain CCI's net debt/EBITDA ratio around 4.5x (potentially ~6x with M&A). The second would involve only a 30% payout ratio, but boost net debt/EBITDA to ~7x (~7.5x with M&A).
- Corvex argues "changing Crown Castle's capital allocation strategy would enable the company to attract a new class of yield-oriented investors," and that the company's plan to delay a full payout structure until the expiration of net operating losses in 2018-2020 is inadequate.
- As for speculation Crown Castle could bid for Verizon's tower portfolio, Corvex thinks CCI should change its capital allocation plan before making any offer. "We do not believe that the company should complete a Verizon transaction by increasing leverage and then de-levering again with no material change to its payout ratio."
- CCI's dividend yield is currently at 1.7%. The company reiterates it will discuss its capital allocation plans during its Oct. 20 Q3 CC.
Sep. 2, 2014, 4:21 PM
- The IRS has ruled "the real property portion of Crown Castle's indoor and outdoor small cell networks and the related rents qualify as real property and rents from real property, respectively," under the rules governing REITs.
- CCI already began operating as a REIT at the beginning of the year. With the IRS letter in tow, the company plans to "take appropriate action to include the qualifying portion of its small cell systems as part of the REIT effective January 1, 2015." Certain "non-qualified assets" will remain held in taxable REIT subsidiaries.
- Shares +1.2% AH.
Jul. 28, 2014, 4:02 PM
- 6 firms have hiked their SBA (SBAC +3.3%) targets following the tower owner's Thursday Q2 beat. 3 of them - Barclays, Pac Crest, and JPMorgan - have lifted their PTs to $125.
- In addition to beating estimates, SBA raised its full-year AFFO guidance to $642M-$669M from a prior $616M-$652M. Revenue guidance has been hiked to $1.5B-$1.52B from $1.447B-$1.487B, and tower cash flow guidance to $1.021B-$1.031B from $989M-$1.009B. The outlook assumes the Oi tower acquisition will close on Dec. 1.
- Peer Crown Castle (CCI +2.4%) has also rallied. The company missed AFFO estimates last Wednesday (while beating on revenue), but also raised its full-year AFFO/share guidance to $4.13-$4.18 from $4.04-$4.08. Site rental revenue guidance was slightly raised to $2.99B-$3B from $2.983B-$2.993B.
Apr. 23, 2014, 5:47 PM
- TriQuint (TQNT) expects Q2 revenue of $215M-$225M and EPS of $0.06-$0.08, above a consensus of $200.3M and $0.04. Shares +6.5% AH. Merger partner RF Micro (RFMD), which reports on April 29, is up 3.1%. Both companies might also be getting a lift from Apple's March quarter iPhone sales print. (Q1 results, PR)
- Fortinet (FTNT) guides in its earnings slides (.pdf) for Q2 revenue of $169M-$172M (above a $168.9M consensus), EPS of $0.10 (below an $0.11 consensus), and billings of $185M-$190M (+17% Y/Y). Q1 billings totaled $188M, +26% Y/Y and well above guidance of $168M-$173M. Shares +4.4% AH. (Q1 results, PR)
- Crown Castle (CCI) has raised its full-year AFFO forecast to $1.346B-$1.361B ($4.04-$4.08/share) from a prior $1.318B-$1.333B. Site rental revenue guidance has been raised by $11M to $2.983B-$2.993B. (Q1 results, PR)
Oct. 21, 2013, 12:46 PM
- Crown Castle (CCI -0.9%) is trading lower following its $4.85B deal to buy and acquire leasing rights to 9.7K AT&T towers, which includes the right to eventually purchase the leased towers for $4.2B. The decline comes even though Crown Castle posted solid Q3 results and issued decent Q4/2014 guidance.
- Nomura sees the deal being modestly accretive, and doesn't like the equity dilution and higher operating leverage that comes with it. Crown Castle is issuing 36M shares of common stock, and 7.5M shares of convertible preferred stock.
- Though Q3 EPS missed by a penny, Crown Castle's AFFO came in at $1.09/share, above a guidance range of $1.02-$1.04/share and up from $0.79/share a year ago. Q4 AFFO is expected to total $1.09-$1.11/share. Crown Castle expects Q4 site rental revenue of $625M-$630M, up from Q3's $621M (+15% Y/Y).
- The company expects 2014 AFFO of $1.546B-$1.561B, up from an expected $1.23B-$1.235B in 2013. The AT&T deal, which increases Crown Castle's tower count by 33% to 40K+, is expected to provide a $245M-$255M boost to 2014 AFFO, exc. financing costs.
Sep. 6, 2013, 10:15 AM
- SBA (SBAC +2.1%) and Crown Castle (CCI +3.2%) have joined American Tower (AMT +4.4%) in rallying following news AMT is acquiring giant private cell tower owner Global Tower Partners for $4.8B ($3.3B in cash + the assumption of $1.5B in debt).
- The WSJ reported a month ago Global Tower, controlled by a REIT managed by Macquarie, was being shopped. The company owns 5.4K U.S. towers and 500 Costa Rican sites, and also has management rights to 9K+ U.S. sites (mostly rooftop assets) and property interests in another 800.
- The deal is expected to close in Q4, and will increase the size of AMT's debt load to $10.3B (offset by just $1B in cash/investments). The announcement comes a month after AMT announced an $811M Mexican/Brazilian tower purchase/lease-back deal with NII Holdings (NIHD +1.4%), and 10 months after it reached a deal to buy 2K German cell sites from KPN for $502M. NII has additional tower assets that could be on the block.
- In July, Muddy Waters criticized the accounting behind an earlier Brazilian tower purchase by AMT. The company strongly refuted Muddy Waters' claims.
Jul. 17, 2013, 10:35 AMMuddy Waters releases its rumored report on American Tower (AMT -2.4%), declaring the cell tower owner a Strong Sell and setting a $44.57 PT. The firm accuses AMT of overstating the price it paid for 666 Brazilian towers by $250M (citing sources and financial documents), makes note of insider selling and perceived corporate governance issues, and deems the rise of carrier Wi-Fi and small cell networks a threat to tower growth. Also, AMT's international ops are accused of overvaluing assets, and of overpaying for towers in exchange for excess rent payments (an arrangement deemed a de facto loan). CCI -1.4%. SBAC -0.8%. (slides - .ppt) | 5 Comments
Jul. 17, 2013, 9:14 AM
Jul. 9, 2013, 9:39 AMA roundup of tech analyst ratings changes: 1) Sprint (S +0.6%) has received an upgrade to Outperform from Cowen in response to the SoftBank deal. 2) H-P (HPQ +0.9%) has been upgraded to Buy by Brean. 3) Nokia (NOK +2.9%) has been downgraded to Neutra by Swedbank. 4) Western Digital (WDC +0.8%) has been started at Outperform, and Seagate (STX +0.5%) at Neutral, by Piper. 5) Crown Castle (CCI +0.4%) has been downgraded to Equal Weight by Evercore. 6) International Rectifier (IRF +3.4%) has been upgraded to Strong Buy by Raymond James. 7) Freescale (FSL +5%) has been upgraded to Overweight by Piper. 8) Synchronoss (SNCR -7.4%) has been downgraded to Sell by Goldman. 9) SolarCity (SCTY -2%) has been started at Hold by Maxim. 10) Ixia (XXIA -22.7%) has been downgraded to Hold by Stifel in response to its Q2 warning. | 3 Comments
Nov. 7, 2012, 1:36 PMU.S. cell tower owners American Tower (AMT +2.4%), SBA (SBAC +1.6%), and Crown Castle (CCI +0.8%) are also getting a lift from AT&T's (T -2.3%) capex plans, which include a push to offer 4G LTE services as a broadband option for rural areas. Wells Fargo expects AMT to benefit from AT&T's plan to adds 10K new cell sites and 40K small cells, while Citi views Ciena (CIEN +8%), Juniper (JNPR +1.8%), Cisco (CSCO -0.9%), and Adtran (ADTN +4.2%) as beneficiaries of Ma Bell's wireline investments. | 1 Comment
Oct. 3, 2012, 5:49 PMU.S. cell tower owners rallied today, possibly in response to the MetroPCS/T-Mobile deal. SBAC +2%. AMT +1.4%. CCI +2.8%. While the reverse merger will result in some duplicate cell sites being eliminated - American Tower just announced MetroPCS and T-Mobile share space on ~1,000 of its sites - it also puts T-Mobile's 4G LTE ambitions on better footing, both by increasing its spectrum assets and allowing the carrier to tap U.S. capital markets. | Comment!
Aug. 16, 2012, 2:19 PMSBA Communications (SBAC -2.2%) slips following a downgrade to Neutral from Citi. Peers Crown Castle (CCI -1.3%) and American Tower (AMT -0.7%) are also underperforming. AMT has seen a couple of downgrades recently on valuation concerns. All three cell tower owners have performed well in 2012. | Comment!
Aug. 7, 2012, 11:24 AM
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