J.P. Morgan analyst Richard Choe has maintained their neutral stance on CCI stock, giving a Hold rating today.
Richard Choe has given his Hold rating due to a combination of factors impacting Crown Castle’s financial outlook. The company’s decision to sell its Fiber segment to focus on being a pure-play U.S. tower company is a strategic move, but it also comes with challenges. The anticipated proceeds of $8.5 billion from the sale are expected to be used primarily for debt reduction, which should result in significant interest savings. However, the reduction in annual dividends by 32% starting in the second quarter of 2025 reflects a cautious approach to managing financial resources.
Despite these strategic changes, Crown Castle faces a decline in organic site rental billings in 2025 due to Sprint-related churn, which affects its growth prospects. The projected AFFOPS for 2025 and 2026 are impacted by these factors, and while the company is expected to achieve some operational savings and revenue growth, these are slightly below the guidance. Consequently, the valuation metrics suggest a cautious stance, with the stock trading at a multiple that reflects these uncertainties. Therefore, maintaining a Hold rating is prudent until there is a clearer outlook on tower growth and a more favorable interest rate environment.
In another report released today, Wells Fargo also upgraded the stock to a Hold with a $105.00 price target.
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