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Barchart
Barchart
Rashmi Kumari

Is American Tower Stock Underperforming the Dow?

Massachusetts-based American Tower Corporation (AMT), boasting a market cap of $97.7 billion, is a leading global REIT specializing in multitenant communications real estate. As a key player in wireless infrastructure, AMT supports global connectivity through its vast portfolio of sites and advances next-generation technologies like 5G, powering reliable networks for billions worldwide.

Companies worth more than $10 billion are generally described as “large-cap stocks,” American Tower exemplifies this classification, highlighting its remarkable scale, resilience, and industry leadership. As a global powerhouse in multitenant communications real estate, American Tower’s expansive portfolio and pivotal role in advancing technologies like 5G underline its stability and capacity to thrive in a dynamic digital landscape. 

However, the wireless communications infrastructure company has declined 14.2% from its 52-week high of $243.56, achieved on Sept. 10. Shares of American Tower have declined 6.5% over the past three months, significantly underperforming the broader Dow Jones Industrials Average’s ($DOWI8.7% gains over the same time frame.

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In the longer term, AMT stock rose 1.4% over the past 52 weeks but dropped 3.2% on a YTD basis, underperforming DOWI’s YTD gains of 19.2% and 26.8% returns over the last year.

To confirm the recent bearish trend, AMT has traded below its 50-day moving average since mid-October. However, the stock has been trading above its 200-day moving average since late November.

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AMT’s stock dropped 4.2% following the release of its Q3 earnings on Oct. 29, which fell short of market expectations. Total revenues came in at $2.52 billion, missing the consensus estimate of $2.76 billion and showing flat growth year-over-year. However, funds from operations (FFO) increased by 2.3% annually to $2.64 per share, surpassing the consensus forecast of $2.54 per share.

The company reported a 1% decline in total property revenue, bringing it to $2.47 billion. Net income significantly dropped 235.2%, reflecting substantial headwinds during the quarter. Adjusted EBITDA declined slightly by 0.9% to $1.7 billion, highlighting ongoing challenges in maintaining operational growth.

However, its rival, Crown Castle Inc. (CCI), has declined 8.4% over the past 52 weeks and has dropped 7.8% on a YTD basis, lagging behind AMT over both time frames.  

Despite AMT’s underperformance over the past year, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 21 analysts covering it, and the mean price target of $241 suggests a premium of 15.3% to current levels. 

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