"We continue to believe we are in the early innings of the small cell growth phase and see further momentum from the expansion of this business going forward. The company is currently yielding attractive returns and hasn't seen any change to the return profile related to competition," analyst Amir Rozwadowski wrote in a note.
However, Rozwadowski acknowledged that increased competition in the future may temper the ultimate attractiveness of the return opportunity over time. Rozwadowski has an Equal-Weight rating on the stock.
Crown Castle reported second-quarter results met or exceeded the midpoint of the company's prior outlook and were broadly in line with Barclays' expectations.
The results included 7 percent year-over-year growth in organic site rental revenue, site rental gross margin of $552 million (68.6 percent margin/+10 percent year-over-year) and AFFO per share of $1.16. Looking forward to third quarter, guidance came in above Barclays prior expectations.
"Primarily driven by higher organic site rental growth and decreased headwinds from non-renewals, new leasing activity is expected to be back half weighted," the analyst added.
Rozwadowski, who has a price target of $100 on the stock, cut his full-year EPS estimate by $0.11 to $0.86.
At time of writing, shares of Crown Castle had fallen 1.35 percent on the day to $97.54.
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