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American Tower Corp AMT

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Morningstar’s Analysis

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American Tower Posts Solid Fourth Quarter but Lays Out Sobering Long-Term Growth Targets

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

While American Tower faced industry headwinds throughout 2020 that slowed sales growth, it had a good fourth quarter that beat FactSet consensus sales and EBITDA estimates and outperformed peers. It also provided a long-term forecast that highlights why we prefer its business to those of its peers, but that should also throw cold water on investors who believe we’re in for supersized growth as U.S. carriers upgrade to 5G networks. We don’t expect to materially change our $190 fair value estimate, as we had already projected an inability for American Tower to maintain recent growth rates in the U.S. If a reset of market expectations brings the firm’s stock price down further, we believe this is the best tower company to own.

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Company Profile

Business Description

American Tower owns and operates more than 180,000 cell towers throughout the U.S., Asia, Latin America, Europe, and the Middle East. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company operates more than 40,000 towers in the U.S., which accounted for more than half of its total revenue in 2020. Outside the U.S., American Tower’s greatest presence is in India and Brazil, where it operates roughly 75,000 and 19,000 towers, respectively. American Tower operates as a real estate investment trust.

Contact
116 Huntington Avenue, 11th Floor
Boston, MA, 02116
T +1 617 375-7500
Sector Real Estate
Industry REIT - Specialty
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 5,618

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