Cautious Outlook for SBA Communications Amid Mixed International Performance and AFFO Challenges

In a report released today, Eric Luebchow from Wells Fargo maintained a Hold rating on SBA Communications (SBAC – Research Report), with a price target of $225.00.

Eric Luebchow has given his Hold rating due to a combination of factors impacting SBA Communications. The company showed promising results in the first quarter, surpassing expectations with a strong bookings pipeline and a new share buyback authorization, which could provide some support to the stock. However, the growth in Adjusted Funds From Operations (AFFO) remains challenging over the next few years, which tempers the overall outlook.
While there is growing optimism in U.S. leasing, particularly with activity from one major carrier, the international scene presents mixed results. Although there are positive signs in leasing rates, elevated carrier churn and restructuring plans in markets like Brazil pose challenges. Additionally, the company’s exit from certain international markets reflects ongoing efforts to improve positioning. Despite some potential modest upside in AFFO guidance, the sentiment around SBA Communications remains cautious, influenced by factors such as churn and debt maturities.

In another report released today, BMO Capital also maintained a Hold rating on the stock with a $240.00 price target.