Still Neutral on American Tower - Analyst Blog
2013年3月14日 - 3:00AM
Zacks
On Mar 13, we maintained our Neutral recommendation on
American Tower Corp. (AMT), as the company’s
bottom line missed the Zacks Consensus Estimate but top line beat
the same in the recently concluded quarter.
Why Kept Neutral?
Higher adoption of smartphones/tablets coupled with increased
deployment of 3G/4G networks by the carriers across the world will
continue to drive the demand for tower space going forward.
American Tower is rapidly expanding its business operations in
various emerging markets.
In addition to Brazil and Mexico, American Tower has taken a
major initiative to expand its operations in India. This will
generate long-run sustainable business for the company.
Moreover, the company has started offering cost-effective
outdoor Distributed Antenna Systems (DAS) to its customers.
Management indicated that DAS has the potential to reach 2.0% of
American Tower’s total revenue over a period of three to five
years.
On the downside, American Tower has a substantially leveraged
balance sheet. At the end of the fourth quarter of 2012, the
company had nearly $8.75 billion of net debt (total debt-cash &
cash equivalents) and a debt-to-capitalization ratio was 0.70. Very
high level of indebtedness increases the possibility that the
company may not be able to generate sufficient amount of cash to
meet its debt obligations in the future. This may also hinder the
company’s effort to access the debt market to borrow and refinance
at favorable rates.
Furthermore, higher customer concentration for American Tower
coupled with huge exposure to foreign exchange rate risks will act
as headwinds for the company going forward.
Currently, American Tower has a Zacks Rank #3 (Hold).
Other Stocks Outlook in Related Industries
Other stocks in the wireless tower industry include
Crown Castle International Corp. (CCI),
SBA Communication Corp. (SBAC) and Equinix
Inc. (EQIX). All 3 stocks currently have a Zacks Rank #3
(Hold).
AMER TOWER CORP (AMT): Free Stock Analysis Report
CROWN CASTLE (CCI): Free Stock Analysis Report
EQUINIX INC (EQIX): Free Stock Analysis Report
SBA COMM CORP (SBAC): Free Stock Analysis Report
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