American Tower REIT’s stock surges to pace gains among its peers, after Oppenheimer turns bullish


Shares of American Tower REIT
AMT,
+6.25%

surged 5.9% in afternoon trading Friday, to pace the gainers among its large-capitalization peers, after Oppenheimer analyst Timothy Horan turned bullish, citing attractive valuation and increasing broadband demand amid the COVID-19 pandemic. Horan raised his rating on the real estate investment trust, which focues on multi-tenant communications real estate, to outperform from peer perform. His price target on the stock (AMT) is $270, which is 10.4% above current levels. “AMT is benefiting from very strong emerging market demand, and India which has been a drag, appears set to accelerate growth as the industry has consolidated down to a reasonable level,” Horan wrote in a note to clients. He said he had been on the sidelines because growth had slowed slightly, uncertainties related to the T-Mobile U.S. Inc.
TMUS,
+1.49%

merger with Sprint and “rich” valuations, but given the declines in Treasury yields, he now believes AMT’s adjusted funds from operations (AFFO) yield of 3.7% are “attractive.” The yield on the 10-year Treasury note
TMUBMUSD10Y,
0.660%

was last at 0.661%, down from 1.919% at the end of 2019. The stock was the biggest gainer Friday among the components of the SPDR Real Estate Select Sector ETF’s
XLRE,
+2.18%
,
which was trading up 1.8% on Friday. Horan also upgraded Crown Castle International Corp.
CCI,
+3.56%

to outperform from perform, and the stock was the REIT ETF’s second biggest gainer with a 3.4% rally. Year to date, AMT has advanced 5.1%, while the REIT ETF has dropped 15.7% and the S&P 500
SPX,
+0.23%

has lost 8.6%.



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