AMT - American Tower: Dual Growth Opportunities In Telecom And Data Center - Reiterate Buy

2024-06-07 14:00:00 ET

Summary

• American Tower remains a Buy, with FQ1'24 bringing forth excellent top/ bottom-line expansion across its telecom/ data center businesses along with a healthier balance sheet.
• It is apparent that the flattish FY2024 dividends have been prudent after all, as its AFFO payout ratio moderates below sector medians, and the management further invests in data centers.
• American Tower has also raised its projections for FY2024, with the accelerated top/ bottom line growth coming relatively cheap compared to its peers.
• The stock continues to offer an attractive risk/reward ratio for capital appreciation and dividend income prospects, thanks to the dual growth opportunities through telecom and data center markets.

We previously discussed American Tower Corporation ( AMT ) in March 2024, discussing why we had upgraded the stock to a Buy after the much-needed pullback from its December 2023 top, thanks to the market's over-reaction to the lowered quarterly dividend payouts on a QoQ basis.

However, we had believed that AMT was a better buy after the correction, thanks to the improving monetization in FY2023, the management's promising FY2024 guidance, and the near-term focus on deleveraging....

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