AMT- Embedded Expectations Analysis - 2019 04 10
American Tower Corporation (REIT) (AMT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 36.2x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about their Carrier consolidation in India, EBITDA and AFFO growth, capital allocation methodology, and the demand for and cost of the CBRS spectrum.Specifically, management may be concerned about the progress of their Carrier consolidation in India, churn rates, and the level of investment needed to deploy 4G in India. Moreover, they may be exaggerating excitement in their Latin America
build-to-suit program and the strength of their return-based capital allocation methodology, and they may lack confidence in their ability to sustain EBITDA and AFFO growth. Furthermore, they may be concerned about the sustainability of US wireless carrier network investments, FX rates, and the impact of the Tata settlement and Carrier consolidation on growth rates. Finally, they may be overstating their ability to scale the addressable CBRS spectrum market, reduce CBRS installation costs, and reduce the mobile industry's carbon footprint.
American Tower is a holding company. Through its subsidiaries, the company is a real estate investment trusts and an independent owner, operator and developer of multitenant communications real estate. The company's primary business is the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. The company also provides tower-related services, including site acquisition, zoning and permitting and structural analysis, which primarily support the company's site leasing business, including the addition of new tenants and equipment on its sites.
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