BMO Capital Markets analyst Ari Klein initiated coverage on Crown Castle Inc (NYSE:CCI) with an Underperform rating and a price target of $113.
The analyst notes CCI’s differentiated approach to growth via fiber/small cells but thinks small-cell deployment is more capital-intensive than towers, resulting in margin drag.
Klein expects CCI’s adjusted FFO/share to decline by 1.7% in 2024 and 1.3% in 2025 and dividend growth to be minimal through 2025.
The analyst estimates an adjusted FFO of $7.66 in 2023 and $7.53 in 2024.
Meanwhile, the analyst believes CCI’s strong position as the U.S. tower operator and portfolio skewed towards urban regions offers it an opportunity to attain a higher share of initial 5G deployments in 2021/2022 but lower in 2023.
Given multiple headwinds, the analyst predicts CCI’s AFFO/share growth will lag peers over the next few years, along with minimal dividend growth.
Also Read: Crown Castle Q1 Highlights: Revenue Beat, Site Rental Revenues Up 3%, Reiterates FY23 Guidance
Price Action: CCI shares are trading lower by 1.01% at $115.26 on the last check Thursday.
