In a report released yesterday, Michael Funk from Bank of America Securities reiterated a Hold rating on SBA Communications, with a price target of $220.00.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
Michael Funk’s rating is based on several key considerations surrounding SBA Communications. Firstly, the recent announcement of the Verizon Master Lease Agreement (MLA) provides a clear view of future activity and growth with a minimum commitment for the next decade. However, the delay in closing the Millicom acquisition due to regulatory reasons has led to a decrease in the company’s 2025 guidance. Additionally, SBA Communications has adjusted its leverage target to a range of 6.0-7.0x, which is part of its transition into an investment-grade-rated company, aiming to operate at lower leverage to safeguard its dividend amidst macroeconomic fluctuations.
Despite the solid third-quarter results that aligned with Bank of America’s expectations and exceeded Street estimates, the company’s 2025 guidance was modestly decreased due to the Millicom acquisition delay. The Neutral rating and price objective of $220 reflect the longer-dated industry catalysts and anticipated increased churn in the coming years, along with fewer offsetting drivers compared to peers. The valuation is based on a multiple that is slightly below SBA Communications’ three-year average and at a discount to the REIT sector, which is deemed appropriate given the longer-term fundamental catalysts and higher churn expectations.
In another report released today, BMO Capital also maintained a Hold rating on the stock with a $210.00 price target.