American Tower Corporation (REIT) (AMT) Buy or Sell Stock Guide
The analysis below may be helpful to you if you have any of the following questions about AMT stock:
- Is AMT a buy or a sell?
- Should I sell or hold AMT stock today?
- Is AMT a good buy / a good investment?
- What are AMT analyst opinions, recommendations, ratings?
Here are AMT stock buy reasons/signals:
1. The tower business model is extremely attractive, providing strong recurring cash flow based on long-term contracts and direct exposure to surging wireless data demand as carriers add new cell sites to their networks.
2. The REIT structure allows the firm to avoid taxes without compromising its growth prospects. The dividend only represents roughly 35% of adjusted funds from operations.
3. The firm now has more than half of its communication sites in international markets. This increases diversification and boosts its growth profile.
4. AMT quarterly revenue growth was 10.70%, higher than the industry and sector average revenue growth (4.91% and 6.53%, respectively).
5. AMT profitability is improving. The YoY profit margin change was 2.60pp.
6. AMT forward dividend yield is 2.19%, higher than the industry (1.14%) and sector (1.19%) forward dividend yields.
7. AMT PEG ratio (P/E adjusted for growth) is 2.37, and it’s low compared to its industry peers’ PEG ratios.
8. AMT average analyst rating is Strong Buy.
9. AMT average analyst price target ($157.55) is above its current price ($138.52).
Here are AMT stock sell reasons/signals:
1. Despite diversification efforts, the top four U.S. carriers still generate 60% of American Tower's leasing revenue. A major disruption in spending among these carrier, potentially resulting from the merger of Sprint and T-Mobile, would seriously hamper growth.
2. The firm's exposure to emerging markets adds foreign exchange risk, exposure to economic volatility, and regulatory uncertainty.
3. Net leverage stands above 5 times EBITDA, a level that leaves the firm exposed to unforeseen changes in tower demand, perhaps resulting from new technologies like small cells.
4. AMT Price/Book ratio is 9.52, and it’s high compared to its industry peers’ P/B ratios.
5. AMT short interest (days to cover the shorts) ratio is 3.25. The stock garners more short interest than the average industry, sector or S&P 500 stock.
What are your thoughts on AMT?
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