NEW YORK-American Tower Corp.’s stock has been upgraded to “Strong Buy” by Raymond James & Associates Inc. in anticipation of several financial actions expected to occur by early 2003.
American Tower is expected to announce structural separation of its Verestar satellite division before year-end, which Raymond James believes will reduce the company’s leverage, cash interest expense and capital expenditures. The analyst firm also believes American Tower is planning to sell non-core assets, which could amount to upward of $100 million. In addition, the company is likely to become free cash flow positive in early 2003 and will likely resolve its 2.25-percent convertible note PUT situation by the first quarter 2003.
Raymond James maintains a $5 price target for American Tower, which it derived through a discounted cash flow analysis.
Following the upgrade announcement, shares of American Tower soared up more than 26 percent to trade at $3.68 per share, above competitor Crown Castle International Corp.’s $3.50.
