Cellnex Delivers in 2023; Maintaining EUR 52 Fair Value Estimate
Cellnex is the only pure independent tower firm of large scale in Europe (Inwit and Vantage Towers are not fully independent, as they are controlled by mobile network operators). Since its inception, Cellnex’s strategy has been to acquire European wireless tower portfolios from MNOs and then lease the towers back to those MNOs while adding other tenants to take advantage of the towers’ operating leverage. MNOs find value in Cellnex’s proposition as they can monetize towers at good valuations and use the proceeds to reduce debt. Transactions are structured as sale and leaseback and provide Cellnex with long-term revenue and cash flow visibility underpinned by its contracts (10- to 25-year durations), which include annual rent escalators often tied to inflation.