CCI - Crown Castle: Shares Should Comfortably Outperform Moving Forward

2024-03-22 16:18:18 ET

Summary

• Crown Castle, a telecommunications firm, has seen recent underperformance but remains undervalued and has significant upside potential.
• Financial results for 2023 showed a decline in revenue, particularly in the Towers segment but growth in the Fiber segment.
• Management has provided guidance for 2024, with expected declines in adjusted FFO, EBITDA, and net profits, but the company still has strong cash flow and attractive valuation compared to similar firms.

One of the companies that I have been the most bullish on over the past several months, but do not own shares of, is telecommunications firm Crown Castle ( CCI ). For those not familiar with the company, it owns and operates telecommunications towers and other related assets such as fiber and small cell operations. Since I initially rated it a 'strong buy' back in October of last year, shares have seen an upside of 21.9% compared to the 17.3% rise seen by the S&P 500. But more recently, performance has lagged. Near the end of November of 2023, I reiterated the 'strong buy' rating I had on the stock because of news that came out involving activist investment firm Elliott Investment Management stepping into the picture and proposing a significant change to the operation. I lauded their approach, even though I felt as though the strategy to create the value they saw was not necessary. But since then, shares have lagged the broader market, seeing an upside of only 1.2% compared to the 11.8% rise generated by the broader market....

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