Back to top

Analyst Blog

We have maintained our Neutral recommendation on Crown Castle International Inc. (CCI - Analyst Report), as both its top and bottom lines topped the Zacks Consensus Estimates in the recently concluded quarter.

Why Remains Neutral?

Higher usage of smartphones and tablets and increased deployment of 4G LTE networks have propelled demand for tower requirement by large carriers. Moreover, the acquisition of NextG Networks Inc. (which comprised of 7,000 Distributed Antenna Systems) and the purchase of 7,200 wireless towers from T-Mobile USA have made them the largest wireless tower operator in the U.S.

Crown Castle’s top-line growth prospect remains highly moving equipments from one tower to another is cumbersome, carriers normally renew these contracts upon expiration, which implies that a high percentage of Crown Castle’s revenue is recurring, hence avoids loss of customers.

Additionally, an expected hike in annual price by about 3-5% will further act as a growth catalyst for Crown Castle going forward.

However, highly leveraged balance sheet and ongoing merger deals between large telecom carriers may act as headwinds for the company going forward. Moreover, Crown Castle is currently trading at a 52-week high.

Crown Castle carries a Zacks Rank #2 (Buy).

Other Stocks Outlook in Related Industries                

Other stocks in this sector like SBA Communications Corp. (SBAC - Snapshot Report), Equinix, Inc. (EQIX - Analyst Report) and American Tower Corporation (AMT - Analyst Report) are set to gain from the robust growth of LTE deployments in the upcoming days. These companies are about to declare their fourth quarter results next month.

Currently, American Tower, SBA and Equinix have a Zacks Rank #3, (Hold) for the short term.

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