![]() Most of AMT's leasholders have entered into non-cancellable terms of 5-10 years with multiple 5-year renewable periods. ![]() 2023 Organic Tenant Billings Growth Outlook ![]() and Canada organic tenant billings growth and record new business contributions. American Tower expects ample growth across geographies with accelerating U.S. With REITs assessing the quality of business of their tenants/leaseholders becomes paramount. This buildout is something to watch as the year progresses. With international global tower assets, faster adoption of 5G and wireless subscriber growth are key upside catalysts, and AMT is transitioning from the 4G capacity stage to coverage stages of 5G with more aggregate capacity additions and shifting out legacy equipment. AMT: Capital Allocation Plans & Debt Exposure VIL informed AMT that it would fail to make its payments through this year (as it had done in 2022).Ī notable risk for AMT is its exposure to floating rate debt, which accounts for about 22% of total debt, that will be hurt in this new higher-rate era, but if the recent decline in yields holds, that could lead to positive EPS and FFO revisions in the coming months. Driving the soft guide was higher expected interest costs and ongoing troubles with Vodafone Idea (VIL). Guidance was light, though, at a range of $9.49 to $9.72 versus a $10.58 consensus estimate as total property revenue is seen as rising just 2.9% this year. The Boston-based $94.2 billion market cap Equity Real Estate Investment Trusts (REITs) industry company within the Real Estate sector trades at a high 53.1 trailing 12-month GAAP price-to-earnings ratio and pays a high 3.0% dividend yield, according to The Wall Street Journal.īack in February, AMT reported an FFO miss of $2.46 while revenue grew by more than 10%, about in line with expectations. The core business for AMT is leasing space on its wireless towers primarily to wireless carriers, government agencies, and broadband data providers. The American Tower portfolio includes approximately 180,000 sites in the U.S., Latin America, India, Europe, and Africa. Real Estate Equities Struggling Against the Broad Market YoYĪccording to Bank of America Global Research, American Tower ( NYSE: AMT ) is the largest global owner and operator of wireless and broadcast communications towers. I see more risks than opportunities ahead in AMT. That is key for American Tower as it is the second-largest position in XLRE and the popular Vanguard REIT ETF ( VNQ). But even with the retreat in rates lately, XLRE has not managed to hold up. The monster jump in yields during September and the first half of October 2022 took down so many rate-sensitive plays such as Utilities and Real Estate. The Real Estate Select Sector ETF ( XLRE ) is down nearly 20 percentage points from its spike high against the S&P 500 during Q2 last year. The Real Estate sector is one I don’t opine on much, but its relative weakness in the face of both rising and falling interest rates should be concerning to REIT bulls.
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