While the coronavirus has caused uncertainty and sparked recessionary fears, temporarily slowing new network builds, tower growth appears set to reaccelerate, according to Oppenheimer.
The American Tower, Crown Castle Analyst
The American Tower, Crown Castle Thesis
American Tower and Crown Castle are both witnessing strong and accelerating demand from carriers, with mobile broadband becoming more important than ever, Horan said in the Friday upgrade note. (See his track record here.)
The analyst expects a solid rebound in tower activity from T-Mobile US, Inc. (NASDAQ: TMUS) this year, buildouts by DISH Network Corp (NASDAQ: DISH), strong spend by Verizon Communications Inc. (NYSE: VZ) and rural fixed wireless boosted by government subsidies.
Massive spectrum auctions scheduled for the back half of 2020 are also positives, he said.
Oppenheimer projects that tower volume growth will accelerate from 4% in 2019 to 9% within two years from small cell strength.
“Various channel checks on 5G builds this week confirm our optimism, as the industry's wireless operators are seeing fixed wireless/enterprise use cases,” Horan said.
The analyst expressed optimism regarding the U.S. wireless services addressable market doubling to $150 billion.
AMT, CCI Price Action
American Tower shares were up 5.36% at $240.38 at the time of publication, while Crown Castle shares were 3.19% higher at $155.64.