Argus Says American Tower Stands Above Its Peers In The Wireless Tower Space

Argus reiterated its Buy rating on American Tower Corp (NYSE: AMT) shares. The brokerage boosted the price objective from $120 to $130 citing expected increased demand from mobile data usage.

Argus analysts, led by Jacob Kilstein, expect American Tower to gain from a yearly increase in lease rate from its media and telecom tenants. Also, the company is likely to gain from the 50 percent annual growth in mobile data usage over the next five years, which would furthermore lift the tower leases demand.

The brokerage pointed out that the company has a good track record of profitability and growth, and it stands above the rivals in the wireless tower segment. The lead analyst liked the company's move to expand globally while seeing the shares gain slightly from its inclusion in the new GICS real estate segment slatted for September.

Related Link: FFO Is The EPS Of Real Estate Investment Trusts

Kilstein commented, "REITs had previously been grouped within the Financial sector. We expect the change to attract more investors to REITs, especially asset managers who have mandates to diversify across all GICS sectors. We thus expect the AMT stock price to increase slightly when the new sector designation takes effect."

Following the better-than-expected results for the second quarter, the brokerage increased its adjusted FFO estimate from $5.67 to $5.68 for 2016 and from $6.51 to $6.52 for 2017.

At time of writing, American Tower was down 0.9 percent on the day, trading at $113.09.

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