Barclays has revised its stance on American Tower (AMT) to underweight, citing heightened risks tied to the company's pending acquisition of EchoStar's tower assets. The move reflects concerns over integration complexity and financial exposure.
- Barclays downgraded American Tower (AMT) to underweight due to risks from EchoStar acquisition
- EchoStar tower assets valued at $2.6 billion, representing 12.3x projected 2026 EBITDA
- Integration costs could slow AMT's EBITDA growth to 4.2% in 2026, down from prior forecasts
- AMT's forward P/E stands at 29.5, with concerns over valuation sustainability
- Acquisition increases exposure to U.S. telecom market, raising concentration risks
Barclays has issued a cautious outlook on American Tower (AMT), downgrading the stock to underweight following the company's announcement of acquiring EchoStar's tower portfolio. The transaction, valued at approximately $2.6 billion, is expected to expand AMT's U.S. footprint but introduces new operational and financial challenges. Barclays analysts note that the integration of EchoStar's legacy infrastructure could strain AMT's capital allocation and delay expected synergies. The firm emphasized that the deal's success hinges on regulatory approvals and spectrum realignment, both of which remain uncertain. American Tower's existing lease portfolio, which accounts for roughly 70% of revenues, is already heavily concentrated in the U.S. market, raising concerns about overexposure. With the EchoStar acquisition, the company's dependency on U.S. telecom operators could rise further, particularly given the ongoing consolidation among wireless providers. Financially, AMT's adjusted EBITDA is projected to grow by 4.2% in 2026, but Barclays now forecasts a 25% slower growth trajectory post-acquisition due to higher integration costs. The analysts also highlight that the $2.6 billion purchase price represents 12.3x AMT's projected 2026 EBITDA, a premium that may pressure near-term earnings per share. The stock currently trades at a forward P/E of 29.5, reflecting a significant valuation multiple that could be vulnerable to macroeconomic shifts. The downgrade impacts institutional investors holding AMT as a core infrastructure play, particularly those focused on stable dividend growth. The move underscores a broader market reassessment of telecom infrastructure exposure amid evolving regulatory scrutiny and rising capital intensity in 5G rollout.