SBA Earnings: Softness in First Quarter Likely to Carry Through 2024; Capital Allocation Looks Good

SBA Communications' underwhelming first-quarter leasing results were generally consistent with the tepid 2024 outlook the firm provided last quarter. Management slightly reduced the leasing outlook further, though we attribute that to slightly higher Oi churn in Brazil following a recent judicial resolution and the strong US dollar rather than weaker demand. We believe we are in a lull for carrier tower investment rather than a new long-term norm. As SBA manages the difficult macroeconomic environment, we applaud its timing of share repurchases while still bringing down debt. We’re maintaining our $250 fair value estimate.