Analysts Are Cutting Price Targets of These 5 Stocks

03. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 65

American Tower Corporation (NYSE:AMT) is an American real estate investment trust company that owns and operates wireless and broadcast communications infrastructure around the world. On July 3, the Royal Bank of Canada (RBC) reduced its price target on American Tower Corporation (NYSE:AMT) from $241 to $233. Despite the adjustment, RBC maintains an Outperform rating on the stock. According to RBC’s analysis, the revised price target indicates a revised expectation for the stock’s future value.

Richie Capital Group made the following comment about American Tower Corporation (NYSE:AMT) in its Q1 2023 investor letter:

“American Tower Corporation (NYSE:AMT) (down -3.6%) – Shares of American Tower lagged in the quarter after a lackluster earnings report and a broader sell-off of in REIT’s. Rising interest rates have hampered the REIT sector as 1) income investors can now find comparable yields from U.S. treasuries, and 2) debt financing for real estate has become considerably more expensive.

In the fourth quarter earnings report, American Tower recorded a -$642 million impairment charge when VIL, American Tower’s largest customer in India, was unable to make their scheduled payments. Management views India as more of an opportunistic growth driver and commented that they are open to all possibilities, including a partial equity sale of the India business. India is a very attractive market long term due to favorable demographics and a growing need for data, but it is encouraging to see that management is clear eyed in assessing this new market.

Despite these temporary headwinds, American Tower’s core business is strong. Management anticipates double digit AFFO growth in 2023 driven by solid organic leasing trends across the global portfolio including a meaningful step up in U.S. and Canadaian organic tenant billings in 2023. Longer term, we believe the ever-expanding need for data will drive more tower demand and density. American Tower has an incredibly attractive business model supported by long-term contracts with large communications companies which include annual price escalators.”