Buy Rating Justified: American Tower’s Strategic Acquisition of CoreSite Strengthens Market Position

In a report released today, David Barden from Bank of America Securities maintained a Buy rating on American Tower (AMT – Research Report), with a price target of $240.00.

David Barden has given his Buy rating due to a combination of factors concerning American Tower’s recent acquisition, CoreSite, and its performance in the market. The acquisition has been leveraged to strengthen American Tower’s position in enterprise colocation services, avoiding the chase for hyperscale opportunities that do not align with their strategic objectives. Barden emphasizes the curated ecosystem approach of CoreSite, highlighting that a significant portion of its revenue base is diversified across multiple interconnections, which reduces vulnerability to the loss of large-scale customers.
Additionally, the demand for CoreSite’s enterprise colocation services is robust, with growth observed among both traditional and digital enterprise sectors. This demand is evident in significant markets such as Boston, Chicago, New York, Los Angeles, Northern Virginia, and Silicon Valley, with preleasing rates at new facilities seeing a notable increase. Despite challenges such as power procurement and supply chain issues, CoreSite’s management is taking proactive steps to mitigate these impacts, which Barden views favorably for American Tower’s outlook and justifies the Buy rating with a price objective of $240.00.

According to TipRanks, Barden is a 4-star analyst with an average return of 4.5% and a 55.08% success rate. Barden covers the Communication Services sector, focusing on stocks such as T Mobile US, AT&T, and BCE.

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American Tower (AMT) Company Description:

Founded in 1995, Massachusetts-based American Tower Corp. is one of the largest real estate investment trusts and is a leading independent owner and operator of wireless and broadcast communications infrastructure in several countries worldwide.