Cellnex Earnings: EBITDAaL Grows 9.8% Year to Date: New MasOrange Deal in the Making

Narrow-moat Cellnex's revenue and EBITDAaL have grown by 7.4% and 9.8% year to date, respectively. EBITDAaL reached EUR 1.72 billion, a 59.3% margin, expanding 100 basis points year over year. Year to date, 53% of tower revenue growth has come from low-capital-expenditure activities like co-location and price escalators, while the remaining 47% has come from build-to-suit activities, which are more capex intensive. Long term, we expect the former to represent a larger chunk of revenue, which we like. Cellnex is slowly but steadily improving its tenancy ratios, having grown from 1.39 times in the beginning of the year to 1.41 times currently, and growing annual revenue per tower to EUR 27,700 from EUR 26,700 a year ago. We are maintaining our EUR 52 fair value estimate and see the shares as undervalued.