American Tower: Steady Domestic Activity But Lower 2H Contribution; Strong CoreSite Trends Increase Growth Outlook; Expect MSD-HSD AFFOPS Growth in 2027+

Research evidence excerpt

American Tower: Steady Domestic Activity But Lower 2H Contribution; Strong CoreSite Trends Increase Growth Outlook; Expect MSD-HSD AFFOPS Growth in 2027+

domestic organic tenant billings growth of 0.5% in 2026, but 4.6% ex- Adj. EPS ($)

DISH, and we expect a similar growth rate of 4.5% for 2027 as new leasing trends 2025A 2026E 2027E

Q1 1.04 1.84A 1.77

remain consistent. This assumption reflects a stagnant new leasing environment, Q2 0.78 1.86A 1.76

but management outlined four longer-term growth catalysts, including Q3 1.82 1.63 1.77

densification, new spectrum coming to market, the eventual transition to 6G, and Q4 1.75 1.61 1.81

growing AI-driven wireless traffic that is becoming more uplink intensive. Capital FY 5.40 6.94 7.11

allocation remains focused on developed market towers and data centers, with Style Exposure

$695m of the $1.9b capex outlook for the year dedicated to CoreSite expansion. In

our view, AMT appears willing to lean into the CoreSite opportunity given the

outsized demand for retail colocation and interconnection. Share repurchases are

another option for capital allocation and the company bought ~0.1m shares for

$19m during 2Q26. We maintain our Overweight rating and establish a Dec-27

price target of $240 (vs. a Dec-26 PT of $240 prior).

• Data center growth provides support as timing remains uncertain for new

leasing reacceleration; operational efficiency and capital allocation

(buybacks) are potential levers for AFFOPS. Revenue growth on the

domestic tower side is underpinned by four major catalysts that management

sees supporting MSD to HSD AFFOPS growth in 2027+. AMT believes

colocations, additional spectrum, data usage, and uplink traffic from AI

applications will drive higher new leasing revenue, but none of these catalysts