On Thursday, Citi reaffirmed its positive stance on American Tower Corporation (NYSE:AMT) stock, maintaining a Buy rating and a price target of $255.00.
The firm's analyst updated their model to align with American Tower's second-half 2024 guidance for the India business within its Asia segment. The analyst noted that forecasts for 2025 and onward are largely unchanged, with only minor adjustments in some line items.
The update follows a review of materials provided by American Tower, which offered no specific insights into the India business's performance relative to the company's guidance. The India operations, considered non-core and set for divestiture, have been adjusted to reflect guidance more closely. The divestiture is anticipated to be finalized by December 31, 2024.
The analyst highlighted that the India business is still included in the forecast for the fiscal year 2024, despite its pending divestiture. The decision to update the outlook was made without any new insights into potential performance deviations from the provided guidance.
American Tower Corporation, which is primarily involved in the ownership, operation, and development of wireless and broadcast communications real estate, has not provided public comments on Citi's reaffirmed position. The company's stock continues to be watched by investors as it approaches the anticipated divestiture of its India business by the end of 2024.
In other recent news, American Tower Corporation has been the focus of multiple analyst updates following the company's strong second-quarter performance. RBC Capital, Citi, and TD Cowen all revised their price targets for the company, maintaining positive outlooks based on robust financial results and strategic initiatives.
RBC Capital raised its price target to $236, citing stronger than anticipated quarterly results and the company's recent regulatory approval for the sale of its Indian assets. Citi increased its price target to $255, highlighting American Tower's potential for improved multi-year growth prospects and strategic positioning.
TD Cowen updated its price target to $239, acknowledging the company's robust second-quarter financial performance and updated full-year guidance.
These developments come after American Tower reported a 5.3% increase in consolidated organic tenant billings, indicating strong demand for its assets. The company's subsidiary, CoreSite, also contributed to this growth with double-digit revenue growth and a record cash backlog. In India, American Tower reversed $67 million of previously reserved revenue due to improved collection trends.
American Tower anticipates an acceleration of US tower activity in 2024, which is expected to lead to significant revenue and gross profit growth. The company is shifting its investment towards developed markets as part of its strategic focus. These recent developments indicate a positive trajectory for the company's future performance.
InvestingPro Insights
As American Tower Corporation (NYSE:AMT) navigates through its strategic moves, including the divestiture of its India business, investors are keeping an eye on its financial metrics and market performance. According to real-time data from InvestingPro, American Tower boasts a solid market capitalization of $102.52 billion, reflecting its significant presence in the industry. The company's P/E ratio stands at 41.12, which might appear high, but when adjusted for near-term earnings growth, the PEG ratio is a more attractive 0.26, indicating potential undervaluation relative to its earnings growth rate.
InvestingPro Tips reveal that American Tower has raised its dividend for 13 consecutive years and is expected to continue its growth trajectory with net income projected to increase this year. These factors, alongside a robust gross profit margin of 71.45% for the last twelve months as of Q2 2024, highlight the company's operational efficiency. Moreover, the company's dividend yield is currently at 2.95%, with a dividend growth of 3.18%, rewarding shareholders with consistent returns.
For those seeking more comprehensive analysis, there are additional InvestingPro Tips available on InvestingPro, which delve deeper into American Tower's financial health and market positioning. With American Tower trading at a high earnings multiple and near its 52-week high, these insights can help investors make informed decisions in the context of the company's strategic moves and market dynamics.
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