Cellnex and Inwit Provide 45% and 15% Upside; Both Benefit From Inflation With No Cyclicality

We believe the current bear market offers an opportunity to buy shares in narrow-moat tower firms Cellnex and Inwit. Tower firms enjoy switching costs as they provide critical infrastructure to mobile operators. Their long-term contracts provide cash flow visibility. Tower firms benefit directly from inflation, as their contracts have consumer price index escalators that flow directly to the top line while operating expenses are less affected. Inwit estimates it will have incremental 1% growth in EBITDA (EUR 5 million) for every 1% increase in inflation. We also expect Cellnex to benefit from inflation, but to a lesser extent, given how its contracts are structured. Cellnex and Inwit provide 45% and 15% upside, respectively.