Crown Castle: Solid 2Q26 Results, But 2H Acceleration Needed with Potential Edge DC Support to Reach Higher End of Guidance; Lower Services Outlook

Research evidence excerpt

Crown Castle: Solid 2Q26 Results, But 2H Acceleration Needed with Potential Edge DC Support to Reach Higher End of Guidance; Lower Services Outlook

asts (FYE Dec)

EBITDA guidance was left unchanged. Management laid out growth potential Adj. EPS ($)

from its visibility to contracted activity under its carrier MLAs, mobile data 2025A 2026E 2027E

Q1 (1.06) 0.35A 0.70

demand growth, new spectrum coming to market, and a nascent but promising Q2 0.67 0.22A 0.69

opportunity to serve edge AI deployments. While still considered to be in “trial Q3 0.74 0.76 0.70

stages,” CCI has noted a growing interest in its sites used to support edge Q4 0.67 0.72 0.71

deployments for workloads including cybersecurity, fraud detection, and real-time FY 1.02 2.04 2.80

data processing. Net leverage at the end of the quarter was 6.3x, inside CCI’s target Style Exposure

6-6.5x range. Funding the dividend remains the top priority followed by meeting

internal capex needs, remaining in the target 6-6.5x leverage range, and excess cash

to be used for share repurchases. We maintain our Neutral rating and establish a

December 2027 price target of $85 (prior Dec-26 PT of $95).

• New leasing still expected to pick up in 2H26; lower services revenue

outlook offsets cost savings. New leasing is tracking below the midpoint of

guidance, implying $60m for the full year (1H annualized) vs. the midpoint of

guidance at $65m. With tower-related leasing tracking towards the low end of

guidance, edge data center leasing is supporting the midpoint or higher range

for core leasing activity revenue. Management expects new leasing to pick up

in the second half, drawing confidence from the fact that the company has

contracted 90% of the FY26 organic growth outlook, up from 80% earlier in

the year.