By Sam Boughedda
American Tower (NYSE:AMT) shares gained nearly 5% Tuesday after JPMorgan analyst Philip Cusick upgraded the tower company two notches to Overweight from Underweight and raised the firm’s price target on the stock to $285 from $245.
The analyst told investors that with the stock down 19% this year and 16.5% since January, they see a positive risk-reward due to the company’s “highly predictable (and recession-resistant) revenue stream.”
In addition, JPMorgan pointed to the stock trading at a lower implied domestic multiple than early this year, Sprint churn easing so growth accelerating in 2023, and the completion of the equity raises (public and private) for the CoreSite acquisition.
“We still see solid domestic activity from incumbent carriers and a committed contribution from Dish, with the potential for upside over time, as well as easing Sprint churn at AMT before its peers. T-Mobile (NASDAQ:TMUS) and AT&T (NYSE:T) are under MLAs and Verizon (NYSE:VZ) remains active, which does not have the same guarantee as an MLA but we expect solid results regardless,” wrote Cusick.
“We look for EBITDA to grow 10.5% y/y in 2022 (~2% organic) and 5.7% in 2023. The company has ~1/3rd of its revenue exposure to positive CPI tailwinds (domestic US, parts of Nigeria and India are not impacted by CPI changes), which is more than peers CCI or SBAC, which are much more heavily US weighted,” the analyst added.