Back to top

Analyst Blog

Zacks Equity Research

Crown Castle Downgraded to Neutral

AMT CCI

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We downgrade our recommendation on Crown Castle International Corp. (CCI - Analyst Report) to Neutral based on its extremely high level of current valuation. The stock price has soared nearly 62% in the last year. The company posted solid financial results for the third quarter of 2012. Management has raised 2012 adjusted EBITDA guidance.

Massive growth of mobile broadband, higher usage of smartphones and tablets together with increased deployment of 4G LTE networks are the long-term positives for the wireless tower industry. We believe future financials of the company will be driven by substantial demand for more tower space to facilitate high-speed wireless networks. Our long-term view regarding wireless tower industry remains intriguing and we believe Crown Castle is well positioned to capitalize on these opportunities.    

Wireless services are advancing rapidly in terms of additional features and capabilities.  Much of the infrastructure and upgrades require effective site management of cell towers and equipment. Crown Castle effectively addresses this opportunity as 95% of its quarterly revenue is currently derived from wireless service providers. The company accumulates most of its revenue from long-term (typically 5-10 year) tower leases. Growing popularity of smart-phone devices is further expected to propel demand for wireless data and video services through web surfing.

The newly acquired T-Mobile wireless towers will enable Crown Castle to improve both its top and bottom line. Crown Castle has completed the acquisition of 7,200 wireless towers of T-Mobile USA for a total consideration of $2.4 billion. With this acquisition, Crown Castle has become the largest wireless tower operator in the U.S. outpacing its closest competitor American Tower Corp. (AMT - Analyst Report).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%