CCI - Crown Castle FQ2 2023 Earnings Preview

2023-07-18 13:10:28 ET

• Telecom tower REIT Crown Castle ( NYSE: CCI ) is scheduled to announce FQ2 earnings results on Wednesday, July 19th, after market close.
• The consensus FFO estimate is $2.01 (+3.48% Y/Y) and the consensus revenue estimate is $1.86B (+7.04% Y/Y).
• Over the last 2 years, CCI has beaten FFO estimates 88% of the time and revenue estimates 100% of the time.
• Q1 results : FFO of $1.91 beats by $0.02 and revenue of $1.77B (+1.7% Y/Y) beats by $10M.
• The company is taking a differentiated approach to growth, compared to peers, through investments in fiber/small cells. But with moderating organic growth, Sprint churn and higher rates, the company's AFFO per share is expected to decline in 2024-2025 and lag peers, BMO Capital Markets said in a recent research report.
• There are long-term growth prospects for cell-tower REITs, and the sector's model is "one of the best businesses out there", the broker said.
• CCI has high-yielding opportunities and offers compelling long-term growth potential alongside very strong business models and management teams, Seeking Alpha analyst Samuel Smith said .
• The company's focus on expanding its small cell business represents a nice opportunity, but the company faces challenges, including the impact of the T-Mobile and Sprint merger as well as elevated interest rates, according to SA contributor Geoffrey Seiler.
• The company has robust fundamentals, including a strong balance sheet, a target of 7%-8% annual dividend growth, and exposure to long-term tailwinds in the data and connectivity segment. Also, CCI's assets are based in the U.S., which makes it immune to foreign exchange risk and regulatory uncertainties, SA author Roberts Berzins said .
• SA analysts give the stock a Buy rating on average, while the sell-side analysts give the stock a Hold rating on average, with an average price target of $145.94.
• Meanwhile, the Quant Rating system gives the stock a Sell rating, citing that the stock is overpriced when compared to other real estate stocks.
• Here is a look at the company's share price movements, compared to peers, in the last 6 months:

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