Crown Castle Earnings: Lighter Carrier Spending Results in Guidance Cut, May Portend Slower 2024

Crown Castle reported a good second quarter, as organic tower leasing growth was slightly better than we anticipated. Fiber leasing fell short of what we expected, as small cell sales growth—which we expect to accelerate—remained muted, and fiber solutions continued to struggle. While Crown did not revise its full-year site leasing revenue guidance, it cut its profit forecasts slightly because of lower tower activity from the carriers, which affects nonrecurring services revenue. More impactful in our view is the effect this year’s activity will have on next year’s new leases. We are modestly reducing the level of acceleration we had projected for next year, leading us to lower our fair value estimate to $137 from $140.