Evercore Partners Initiates Coverage on the Telecom Towers Sector (AMT, SBAC, CCI)

Evercore Partners is out with some research reports this afternoon, where it initiates coverage on the Telecommunications Tower sector. The Evercore analysts believe that the towers sector has strong secular drivers, a strong free cash flow story, and attractive valuations. While the analysts rate each of the three main competitors in the space separately, they believe that a basket approach is the best way to invest in the space. As a whole, tower stocks at EV/EBITDA multiples of 17.9x 10E and 16.1x 11E, which is in-line with the historical averages for the group, but below the 20x-plus multiples achieved pre-recession. They believe strong recurring FCF growth, and the likelihood of REIT conversion over the longer term, support further upside in shares. • American Tower AMT is Overweight rated with a $60.00 price target • Crown Castle International Corp. CCI is Overweight rated with a $51.00 price target • SBA Communications Corp. SBAC is Overweight rated with a $45.00 price target