Crown Castle Stock: Is CCI Outperforming the Real Estate Sector?
Valued at a market cap of $44.9 billion, Crown Castle Inc. (CCI) is a prominent provider of shared communications infrastructure in the U.S. Headquartered in Houston, Texas, the company owns and leases a nationwide portfolio of over 40,000 cell towers and approximately 90,000 route miles of fiber, supporting small cell networks and fiber solutions across all major U.S. markets.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Crown Castle fits this description perfectly. The REIT stands as a backbone of U.S. wireless infrastructure. With its pivot back to a tower-focused model, the company is poised for steadier cash flows and shareholder returns, although growth dynamics may change as small-cell and fiber enterprises transition to new ownership.
Despite its notable strengths, CCI shares have dipped 14.6% from their 52-week high of $120.92 touched on Sept. 16, 2024. Over the past three months, CCI has gained 1.3%, outperforming the Real Estate Select Sector SPDR Fund’s (XLRE) 1.4% fall during the same period.
In the long term, CCI climbed 9.1% on a YTD basis, exceeding XLRE’s 2.9% rise. However, over the past 52 weeks, Castle Crown shares have plunged 1.6%, lagging behind the XLRE’s 10.2% rally.
Despite recent fluctuations, CCI has been trading below its 50-day and 200-day moving averages since the end of last month, indicating a downtrend.
On May 22, Crown Castle shares fell 1.6% after the company announced a 32% cut to its quarterly dividend, lowering it to $1.0625 per share from $1.565. The reduction follows Crown Castle's decision to sell its fiber business, which is expected to shrink its revenue and operational footprint. Once known for a high dividend yield of 6.17%, the company is now facing financial pressure from elevated interest rates and tenant challenges.
In the dynamic real estate sector, rival American Tower Corporation (AMT) has outperformed, gaining 9.6% in the last 52 weeks and 16% on a YTD basis.
Analysts are moderately optimistic about its prospects. CCI has a consensus "Moderate Buy" rating from 19 analysts. Its mean price target of $114.11 represents an upswing potential of 15.2% from the prevailing price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
