American Tower Faces Challenges Amid Mixed Earnings Report
American Tower Corporation (AMT), headquartered in Boston, is a major player in managing multitenant communications real estate. With a market cap of $91.2 billion, its operations extend across the Americas, Europe, Africa, and the Indo-Pacific.
Stock Performance Falls Short of Market Expectations
Over the past year, American Tower’s stock has struggled compared to the broader market. Year-to-date, AMT shares have dropped 9.6%. In contrast, the S&P 500 Index ($SPX) has experienced a significant rise, gaining 25.5% in 2024 and 35.7% over the past year.
AMT’s stock dropped 4.2% following disappointing Q3 earnings reported on October 29. The company’s total operating revenues were flat at $2.5 billion compared to the same quarter last year, falling short of Wall Street’s expectations. Notably, property revenues decreased by 1%, attributed to declining leasing revenue. Furthermore, American Tower recorded a substantial loss of $1.2 billion from selling its Indian operations, leading to a $792.3 million net loss for shareholders in this quarter, down from a $586.9 million profit during the same period last year.
Positive Growth in Adjusted Funds from Operations
On a brighter note, AMT’s adjusted funds from operations (FFO) grew by 2.6% year-over-year, reaching $1.2 billion. The adjusted FFO per share came in at $2.64, surpassing analysts’ expectations by 7.8%.
Analysts Project Modest Growth This Year
For the ongoing fiscal year ending in December, analysts project a 2.1% increase in adjusted FFO per share, estimating it will reach $10.08. Notably, the company has a strong history of exceeding FFO estimates, having done so in each of the last four quarters.
Current Analyst Ratings Show Moderate Optimism
Currently, AMT is rated as a “Moderate Buy” by analysts. Out of 21 analysts who cover the stock, 14 recommend a “Strong Buy,” one suggests a “Moderate Buy,” while six hold a “Hold” rating. This marks a slight decline from two months earlier when the consensus was “Strong Buy” with 15 recommendations.
Price Targets Indicate Potential Upside
On October 30, Scotiabank analyst Maher Yaghi reaffirmed a “Sector Outperform” rating but lowered the price target to $236. The average mean price target for AMT stands at $241.22, indicating a potential premium of 23.6% compared to current price levels. The highest target from analysts is set at $260, presenting a prospective upside of 33.2%.
On the date of publication, Aditya Sarawgi did not have (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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
