American Tower Corp. (NYSE:AMT) is an attractive American REIT (real estate investment trust) that has earned a Strong Buy rating from Wall Street analysts. AMT is poised to benefit from advancements in 5G, artificial intelligence (AI), and the requirement for additional computing workload, all of which are expected to drive the momentum for communications infrastructure assets.
Massachusetts-based American Tower is an independent owner, developer, and operator of wireless and broadcast communications infrastructure worldwide. Its operations span 25 countries across six continents.
American Tower Boasts Regular Dividend
According to regulations, REITs are supposed to pay 90% of their taxable income as dividends to shareholders. AMT’s most recently paid quarterly dividend of $1.62 per share reflects a yield of 3.54%.
In FY23, AMT’s revenues grew 4% annually to $11.14 billion. However, net income attributable to AMT common stockholders decreased 16% to $1.48 billion. Currency headwinds and a rise in interest expense impacted the bottom line.
For Fiscal 2024, AMT projects total property revenue in the range of $11.05 to $11.23 billion and distributable net income between $3.295 and $3.405 billion.
Analysts Bullish About AMT’s Long-Term Outlook
Recently, BMO Capital analyst Ari Klein reiterated a Buy rating on AMT with a price target of $228 (27.6% upside). Following an investor meeting with AMT’s top brass, Klein expressed optimism about the long-term demand drivers and shifting investment priorities.
Klein noted AMT’s shift toward developed markets and data centers, lesser churn compared to rivals, and an improving balance sheet as factors that could translate to higher earnings power.
Similarly, Wells Fargo analyst Eric Luebchow initiated coverage of AMT with a Buy rating and price target of $235 (31.6% upside).
Also, MoffettNathanson analyst Nick Del Deo kept his Buy rating on AMT but cut the price target to $216 (20.9% upside) from $220. Deo reduced his price target based on his revised estimates but remains bullish about the long term potential of the company.
Is AMT a Buy?
Overall, with 11 Buys versus two Hold ratings on TipRanks, AMT stock commands a Strong Buy consensus rating. The average American Tower price target of $225 implies nearly 26% upside potential from current levels. In the past year, AMT stock has lost 15.4%.
Ending Thoughts
Despite a tough real estate market in 2023, American Tower was able to deliver on both the top and bottom lines, displaying its resilience and robust financial standing. Moreover, the REIT pays a reasonable dividend, which is bound to grow in the long term, making it an attractive investment opportunity as per analysts.
