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MoffettNathanson cuts American Tower stock target, keeps buy rating

EditorNatashya Angelica
Published 04/08/2024, 11:25 AM

On Monday, MoffettNathanson adjusted its outlook on American Tower Corporation (NYSE:AMT), a real estate investment trust and a leading independent owner, operator, and developer of multitenant communications real estate. The firm lowered its stock price target on the stock to $216 from the previous $220 while maintaining a Buy rating.

The change in the price target reflects a detailed valuation approach based on the expected earnings before interest, taxes, depreciation, and amortization (EBITDA) for the coming years. Specifically, the target price is derived from applying multiples to the projected 2028 EBITDA for various segments of American Tower's business, including domestic and international towers, data centers, and services.

The multiples used in the valuation include 25 times the estimated 2028 domestic tower EBITDA, 13 times the international tower EBITDA, 23 times the data center EBITDA, and 8 times the services EBITDA. These figures are then discounted to present value along with intermediate unlevered free cash flow projections.

American Tower's new price target from MoffettNathanson is based on the firm's confidence in the company's performance and future cash flows. The Buy rating suggests that the firm continues to see American Tower as a favorable investment despite the minor adjustment in the price target.

Investors and market watchers will likely monitor American Tower's performance in relation to these projections, as the company plays a significant role in the telecommunications infrastructure sector. The revised price target provides a reference point for evaluating the company's stock value moving forward.

InvestingPro Insights

For investors seeking to understand the current financial health and market position of American Tower Corporation, real-time data from InvestingPro offers valuable insights. With a market capitalization of $88.69 billion and a high P/E ratio of 59.92, American Tower is trading at significant earnings multiples, reflective of the market's expectations for future growth. This is further supported by a solid revenue growth of 4.04% over the last twelve months as of Q1 2023.

Delving into the InvestingPro Tips, American Tower has a robust track record of raising dividends, doing so for 14 consecutive years, which could be appealing for income-focused investors. Moreover, the company's net income is expected to grow this year, and three analysts have revised their earnings upwards for the upcoming period, indicating potential optimism in the company's financial prospects.

For those interested in further in-depth analysis and additional InvestingPro Tips, they can explore the full suite of insights available for American Tower at https://www.investing.com/pro/AMT. There are 6 more tips listed in InvestingPro that could provide a more comprehensive understanding of the company's position. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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