American Tower Corp (AMT) is set to come back from an underperformance last year, says Stifel, Nicolaus & Co. Analyst Benjamin Lowe, and is on track to see the best organic growth in five years as well as attractive same-tower growth due to the company’s solid underlying fundamentals.
“The past five years or so, for the towers overall including AMT, we have seen massive multiyear runs, so some of the lag is just the group taking a breather or consolidating some of those gains in recent years,” Lowe said. “So it’s been a great multiyear stock, and last year again I think for variety of reasons — one, rising rates; two, earlier on in the year there were concerns about potential deceleration in growth as we look into 2014 and 2015 — the stocks underperformed.”
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Lowe is positive on AMT because not only are the company’s underlying fundamentals strong, but it is on track to experience the best organic growth in years; thus he views the company trading at a slight discount on a valuation basis.
“The initial commentary around 2014 suggest that growth might not be quite as high as 2013, but it’s going to be in the same ballpark of high-single-digit plus organic same-tower growth, which is very attractive for this business. So the fundamentals are very healthy, probably arguably as healthy as they have been in several years. The stock performance last year wasn’t great, but I think the setup going into 2014 is pretty good,” Lowe said.
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