On Wednesday, Raymond James made a positive adjustment to its outlook on American Tower Corporation (NYSE:AMT), increasing the price target to $226 from $221. The firm maintained its Outperform rating on the stock. This revision follows American Tower's fourth-quarter 2023 earnings and the initial guidance for 2024, which largely surpassed the expectations set by Raymond James.
American Tower reported an Attributable Adjusted Funds From Operations (AFFO) of approximately $10.33 per share, which includes an estimated $82 million impact from the devaluation of the Nigerian Naira.
This figure is slightly above the Raymond James' previous estimate of $10.23 and the consensus estimate of $10.31 per share. The updated guidance and recent financial results have reinforced the firm's confidence in the stock's performance.
The analyst from Raymond James highlighted several factors contributing to the positive stance on American Tower. The firm anticipates that stabilizing or potentially declining interest rates could favorably influence the multiples of tower stocks.
Moreover, it is believed that most of the fundamental challenges, such as Sprint churn and a temporary slowdown in U.S. leasing, have already been factored into the current stock price.
The analyst also pointed out that tower stocks, including American Tower, are seen as fundamentally non-cyclical and offer attractive cash yields, underpinned by long-term secular growth. Compared to other real estate investment trust (REIT) sectors and data centers, tower stocks are considered to be attractively valued, presenting a favorable risk-reward scenario for investors.
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