Crown Castle's AFFO/Share Growth Likely To Lag Peers Despite Initial 5G Deployment Advantage: Analyst

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BMO Capital Markets analyst Ari Klein initiated coverage on Crown Castle Inc CCI with an Underperform rating and a price target of $113. 

The analyst notes CCI's differentiated approach to growth via fiber/small cells but thinks small-cell deployment is more capital-intensive than towers, resulting in margin drag.

Klein expects CCI's adjusted FFO/share to decline by 1.7% in 2024 and 1.3% in 2025 and dividend growth to be minimal through 2025.

The analyst estimates an adjusted FFO of $7.66 in 2023 and $7.53 in 2024. 

Meanwhile, the analyst believes CCI's strong position as the U.S. tower operator and portfolio skewed towards urban regions offers it an opportunity to attain a higher share of initial 5G deployments in 2021/2022 but lower in 2023.

Given multiple headwinds, the analyst predicts CCI's AFFO/share growth will lag peers over the next few years, along with minimal dividend growth.

Also ReadCrown Castle Q1 Highlights: Revenue Beat, Site Rental Revenues Up 3%, Reiterates FY23 Guidance

Price Action: CCI shares are trading lower by 1.01% at $115.26 on the last check Thursday.

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