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.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
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.