Valued at $89.8 billion by market cap, Massachusetts-based American Tower Corporation (AMT) is one of the largest global Real Estate Investment Trusts (REITs) and a leading independent owner, operator, and developer of communications real estate. In addition to wireless and broadcast towers, American Tower's assets and solutions encompass rooftops, Distributed Antenna Systems (DAS), data centers, and programs for New Tower Development and Backup Power.
Companies valued at $10 billion or more are generally classified as "large-cap" stocks and American Tower fits right into that category, boasting a market cap that surpasses this threshold. With over 42,000 strategically positioned towers throughout the U.S., American Tower leverages over 25 years of industry expertise to offer comprehensive solutions. It is renowned for its site locator online tool, which provides exceptional access to asset information, empowering customers to make informed decisions to meet their network coverage and capacity objectives.
However, the infrastructure REIT has almost slipped 12% from its 52-week high of $219.10, achieved this February. Shares of AMT have dropped 1.6% over the past three months, lagging behind the broader S&P 500 Index’s ($SPX) gains of around 6.6% during the same period.
Longer term, AMT is down 10.7% on a YTD basis, lagging behind SPX's 15% gains. Moreover, Shares of AMT have declined marginally over the past 52 weeks, compared to SPX's 24.4% returns over the same time frame.
Nevertheless, despite its relative underperformance, AMT has been trading slightly higher than both its 200-day and 50-day moving averages since the beginning of this month.
American Tower’s underperformance compared to the broader market can be attributed to the industry headwinds. Higher interest rates, forex jolts, and customer consolidation have collectively dampened the infrastructure REIT’s earnings potential over the past year.
However, following the announcement of its better-than-expected Q1 earnings results on Apr. 30, the stock jumped nearly 3.1% in the subsequent trading session. Strong demand across U.S. and European assets, positive trends in India's collections, and vigorous leasing at CoreSite fueled this impressive quarterly result, igniting a bullish market response.
Moreover, its rival Crown Castle Inc. (CCI) is underperforming– not just AMT but also the broader equity benchmark. Shares of CCI have pulled almost 16.8% over the past 52 weeks and 17.2% on a YTD basis.
Despite AMT’s underwhelming price action, analysts remain bullish about its prospects. Among the 19 analysts covering the stock, there is a consensus rating of “Strong Buy,” and it is currently trading below the mean price target of $228.17.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
