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Guggenheim: Cell Tower REIT Crown Castle Has Compelling Outlook As 5G, Mobile Data Grow

Priya Nigam

Crown Castle International (NYSE: CCI) reported strong fourth-quarter results Wednesday, backed by an ongoing high level of spending by all four major wireless carriers in the U.S., according to Guggenheim.

The Analyst

Guggenheim’s Robert Gutman maintains a Buy rating on Crown Castle with an unchanged $120 price target.

The Thesis

Crown Castle’s net organic growth for the year was in-line with expectations, Gutman said in a Friday note. 

A minor increase in small-cell bookings at year-end resulted in full-year leasing of $58 million versus the estimate of $55 million, the analyst said. 

The 2019 outlook seems solid, with revenue, EBITDA, AFFO and AFFO per share growth of 5.2 percent, 7.2 percent, 7.1 percent and 6.6 percent, respectively, Gutman said. Organic growth should accelerate to 6 percent, he said. 

Notably, the company deployed 7,000 small-cell nodes in 2018 and is targeting 10,000-15,000 in 2019, according to Guggenheim.

The small-cell backlog stands at 35,000 nodes, and while this segment’s development has warranted increasing capex, management indicated that this would be “comfortably financed with debt,” Gutman said. 

Crown Castle is well-positioned, with carriers increasing their spending on their path to 5G and mobile data traffic expected to grow, according to Guggenheim. 

Price Action

Crown Castle shares were trading 1.3-percent higher at $113.37 at the time of publication Friday. 

Related Links:

Guggenheim: Wireless Carrier Spending On 5G A Bullish Signal For Tower Companies

Raymond James: T-Mobile, Sprint Merger A Factor In 5G Race With China

Latest Ratings for CCI

Date Firm Action From To
Jan 2019 Goldman Sachs Downgrades Buy Neutral
Dec 2018 Wells Fargo Maintains Outperform Outperform
Oct 2018 Barclays Maintains Equal-Weight Equal-Weight

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View the Latest Analyst Ratings

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