We are reaffirming our long-term Neutral recommendation on
Crown Castle International
) ahead of its first-quarter 2013 financial results. The company
is expected to continue its momentum going forward.
Higher usage of smartphones and tablets and increased
deployment of 4G LTE networks have propelled demand for tower
requirement by large carriers. Moreover, the acquisition of NextG
Networks Inc. (which comprised 7,000 Distributed Antenna Systems)
and the purchase of 7,200 wireless towers from T-Mobile USA have
made it the largest wireless tower operator in the U.S.
Crown Castle's top-line growth prospect remains high as it has
become imperative for the carriers to improve network quality and
coverage to meet the growing demand for data and video. As
moving equipment from one tower to another is cumbersome,
carriers normally renew these contracts upon expiration, which
implies that a high percentage of Crown Castle's revenue is
recurring, hence reduces customer loss.
Additionally, an expected hike in the annual price by about
3-5% will further act as a growth catalyst for Crown Castle,
However, a highly leveraged balance sheet and the ongoing
merger deals between large telecom carriers may act as headwinds
for the company, going forward. Crown Castle is currently trading
at the high end of its 52-week price range.
Crown Castle carries a Zacks Rank #3 (Hold).
Other Stocks Outlook in Related Industries
Other stocks in this sector like
SBA Communications Corp.
American Tower Corporation
) are set to gain from the robust growth of LTE deployments in
the future. Equinix and SBA are expected to declare results on
Apr 24 and Apr 29, respectively. AMT will deliver its
results on May 1, 2013.
Currently, SBA has a Zacks Rank #2 (Buy) while American Tower
and Equinix carry a Zacks Rank #3 (Hold).
AMER TOWER CORP (AMT): Free Stock Analysis
CROWN CASTLE (CCI): Free Stock Analysis
EQUINIX INC (EQIX): Free Stock Analysis
SBA COMM CORP (SBAC): Free Stock Analysis
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