American Tower: Maintaining Hold Amid DISH Exposure Uncertainty and Diminished Growth Outlook

BMO Capital analyst Ari Klein downgraded the rating on American Tower to a Hold today, setting a price target of $185.00.

Ari Klein has given his Hold rating due to a combination of factors tied primarily to the uncertainty around American Tower’s exposure to DISH. Despite the stock’s recent underperformance relative to the broader market, he expects the negative sentiment related to DISH’s spectrum sales and the risk of potential lease non-payment to persist, limiting near-term upside. The lack of clarity on when and how the DISH situation will be resolved, and the possibility that the ultimate value realized could be significantly below the roughly $1.6 billion net present value estimate, lead him to adopt a more cautious stance. Reflecting this risk, he removes DISH’s expected contribution from his financial model, given concerns about non-payment and the need for reserves.

At the same time, Klein notes that the company’s growth profile takes a meaningful hit as DISH represented a notable share of American Tower’s domestic and overall property revenue, and an even larger portion of recent leasing growth. With no incremental leasing from DISH anticipated and few offsetting positive catalysts on the horizon, the earnings growth trajectory becomes less compelling in the near term. Although American Tower maintains a strong legal position regarding its contracts, Klein does not foresee a quick or clean resolution that would restore investor confidence. As a result, he prefers to stay on the sidelines with a Market Perform (Hold) rating and a $185 price target until there is better visibility on the DISH outcome and its financial impact.

Klein covers the Real Estate sector, focusing on stocks such as American Tower, Crown Castle, and Equinix. According to TipRanks, Klein has an average return of 3.7% and a 51.79% success rate on recommended stocks.