On Jun 14, we maintained our Neutral recommendation on
Crown Castle International Inc.
), as both its top and bottom lines topped the Zacks Consensus
Estimate in the recently concluded quarter.
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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Why Maintained Neutral?
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 comprise 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 is expected to grow by huge margin
as moving of equipments from one tower to another is cumbersome,
so carriers normally renew these contracts upon expiration, which
implies that a high percentage of Crown Castle's revenue is
recurring, hence avoids loss of customers.
Additionally, an expected hike in the annual price by about 3-5%,
will further act as a growth catalyst for Crown Castle, going
forward. Moreover, such strong catalysts have allowed the company
to raise its revenue guidance for fiscal 2013.
However, a highly leveraged balance sheet and the ongoing merger
deals between large telecom carriers may act as headwinds for the
company, going forward. Moreover, Crown Castle is currently
trading at a 52-week high.
Crown Castle carries a Zacks Rank #2 (Buy).
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 upcoming days. These companies are about to declare their
fourth-quarter results next month.
Currently, SBA Communications Corp. has a Zacks Rank #2 (Buy)
while both American Tower Corporation and Equinix, Inc. have a
Zacks Rank #3 (Hold).