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Crown Castle International Corp CCI

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Crown Castle's Mixed Q3 Results and 2022 Guidance Are in Line With Its Prior Commentary

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Crown Castle management continued its optimistic tone on its third-quarter call, again highlighting record tower activity and small-cell bookings so far this year. But while tower financial performance remains strong, it hasn’t reached levels of a few years ago, and it will remain below those levels in 2022, based on the firm’s guidance. The strong small-cell bookings are misleading, considering that they come almost exclusively from a single contract booked in January, and new small-cell revenue will be anemic in 2022. We remain very positive on the prospects for towers but skeptical of eventual small-cell success. With the quarter providing little reason to deviate from our expectations, we are maintaining our $110 fair value estimate and view the shares as overvalued.

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Company Profile

Business Description

Crown Castle International owns and leases roughly 40,000 cell towers in the United States. It also owns more than 80,000 route miles of fiber. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company’s fiber is primarily leased by wireless service providers to set up small-cell network infrastructure and by enterprises for their internal connection needs. Crown Castle’s towers and fiber are predominantly located in the largest U.S. cities. The company has a very concentrated customer base, with more than 70% of its revenue coming from the big three U.S. mobile carriers. Crown Castle operates as a real estate investment trust.

1220 Augusta Drive, Suite 600
Houston, TX, 77057-2261
T +1 713 570-3000
Sector Real Estate
Industry REIT - Specialty
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 4,900