On Sep 10, 2014, Zacks Investment Research upgraded American Tower Corporation (AMT) by a notch to a Zacks Rank #2 (Buy).
Why the Upgrade?
American Tower has witnessed rising earnings estimates following strong second-quarter 2014 results on July 30, 2014. Over the last 60 days, for the current year, the company has witnessed eight upward revisions with the Zacks Consensus Estimate for earnings moving north from $2.16 to $2.22, reflecting an increase of 2.8%. Notably, the company has delivered positive earnings surprises in the last two quarters.
This global wireless communication tower operator also raised its guidance for full year 2014 based on rising 4G LTE deployment.
In the second quarter, American Tower’s earnings came in at 58 cents per share surpassing the Zacks Consensus Estimate of 52 cents by 11.5%. The company’s earnings grew a whopping 132% on a year-over-year basis. Total revenue of $1,031.5 million increased 27.5% year over year and also steered ahead of the Zacks Consensus Estimate of $1,000 million.
Higher adoption of smartphones/tablets coupled with increased deployment of 3G/4G networks by carriers across the world continues to drive demand for tower space and in turn, drive the company’s revenues higher.
Meanwhile, American Tower is rapidly expanding its business operations in various emerging markets. In addition to Brazil and Mexico, the company has taken a major initiative to expand its operations in India. Recently, the company also announced its intention to acquire BR Towers. The deal is expected to close by the end of 2014.
Stocks That Warrant a Look
Other stocks that warrant a look in the wireless tower industry include Ashford Hospitality Trust, Inc. (AHT), Chambers Street Properties (CSG) and DCT Industrial Trust Inc. (DCT). All these stocks carry the same Zacks Rank as American Tower.
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