American Tower Corporation: Market Stability Amid Recent Fluctuations
With a market capitalization of $97.5 billion, American Tower Corporation (AMT) stands as a frontrunner in communications real estate, classifying it as one of the largest real estate investment trusts (REITs) globally. The company operates an expansive portfolio featuring over 148,000 communications sites worldwide. It offers leasing solutions for towers, in-building systems, outdoor distributed antenna systems, and managed rooftops.
As a large-cap stock, American Tower exceeds the $10 billion threshold typically associated with such classifications. Its extensive U.S. data center facilities play a critical role in supporting network expansion across its interconnected footprint.
Despite its strong positioning, American Tower has faced a 15.2% decline from its 52-week high of $243.56 reached on September 10, 2024. Over the past three months, AMT has seen a slight decrease in its share price, yet it outperformed the Real Estate Select Sector SPDR Fund (XLRE), which fell by 2.9% in the same period.
In the longer term, American Tower’s shares have increased by 12.2% year-to-date, significantly outpacing XLRE’s 4.5% gain. However, looking back over the last 52 weeks, shares of AMT have dipped slightly, lagging behind XLRE’s 7% return for the same timeframe.
Recently, American Tower’s Stock has traded below its 50-day moving average since October last year and has yet to reclaim its 200-day moving average since November.
In terms of financial performance, American Tower reported a Q4 2024 FFO of $2.32 per share, which slightly missed analyst expectations. Nevertheless, the stock surged 6.1% after the earnings announcement on February 25. The company reported revenue growth of 3.7% year-over-year, reaching $2.6 billion, and net income saw a marked improvement, largely due to lower operating expenses—a significant 20% decrease driven by reduced depreciation and amortization costs. Notably, free cash flow grew by 22% to $746 million, bolstered by increasing demand in the data center segment attributed to AI advancements.
Comparatively, its competitor Equinix, Inc. (EQIX) has underperformed relative to AMT, with shares declining 4.8% year-to-date and experiencing a slight dip over the past 52 weeks.
Despite AMT’s recent underperformance, analysts maintain a positive outlook. The consensus rating stands at “Strong Buy” from 23 analysts, and the stock is currently trading below the mean price target of $226.25.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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