Challenges Loom for Crown Castle as Earnings Report Approaches
Crown Castle’s Performance and Expectations
Crown Castle Inc. (CCI), based in Houston, Texas, owns and operates over 40,000 cell towers alongside approximately 90,000 route miles of fiber. This extensive network supports small cells and fiber solutions in nearly every major U.S. market. With a market cap of $39.4 billion, CCI provides crucial wireless communication infrastructure in both the U.S. and Australia. The company is set to release its fiscal fourth-quarter earnings for 2024 on Wednesday, Jan. 22.
Projected Earnings Reveal a Slowdown
Analysts anticipate CCI will report earnings of $1.74 per share on a diluted basis, which represents a decrease of 4.4% from last year’s figure of $1.82. Notably, CCI has a track record of exceeding Wall Street’s earnings per share (EPS) predictions in its most recent quarterly reports.
Overall, projections for the full year suggest CCI will see an EPS of $6.67, an 11.7% reduction from $7.55 in fiscal 2023. The forecast for fiscal 2025 indicates an even smaller EPS of $6.59, reflecting a 1.2% decline year over year.
Stock Performance Raises Concerns
Over the past 52 weeks, CCI stock has significantly lagged behind the S&P 500’s gains of 23.7%, with a drop of 23.5% in its stock value during the same timeframe. This underperformance also contrasts with the minor losses of the Real Estate Select Sector SPDR Fund’s (XLRE) shares.
Factors Impacting Growth
The struggles faced by CCI can largely be attributed to high interest rates and tenant-related issues, both of which have hindered the company’s growth. Additionally, there was a downward revision of its full-year net income forecast due to the cancellation of contracts for 7,000 greenfield small cell nodes.
Recent Earnings Report Shows Some Promise
On Oct. 16, following the announcement of its Q3 results, CCI shares increased by over 1%. The company’s funds from operations (FFO) were reported at $1.84, surpassing the expected $1.80. Revenue reached $1.7 billion, exceeding analysts’ predictions of $1.6 billion. For the full year, Crown Castle expects FFO to range between $6.91 and $7.02.
Analysts’ Outlook Remains Cautious
The consensus among analysts regarding CCI stock suggests caution, with a general “Hold” rating. Among the 19 analysts following the stock, four recommend a “Strong Buy,” one suggests a “Moderate Buy,” 12 advocate for a “Hold,” and two advise a “Strong Sell.” The average price target from analysts stands at $114.94, indicating a potential upside of 28.8% from current levels.
On the date of publication, Neha Panjwani did not hold positions in any of the securities mentioned. All information provided is for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
