To some, the FCC’s broadcast spectrum auction may be viewed as a pending failure, with Marci Ryvicker, Managing Director at Wells Fargo Securities, the latest to express concerns that the auction won’t reach its conclusion.
From the vantage point of American Tower Corp. EVP/CFO Tom Bartlett, the incentive auction “will be a net positive for us,” he told attendees Wednesday at the 44th annual UBS Global Media and Communications Conference in New York.
In fact, he said ATC could benefit from what lies ahead for television stations — a little bit of nuttiness.
“Whenever you’re in a situation of a little bit of chaos, from the broad perspective of where television stations will be because of the repack and the spectrum auction, this could be a positive,” Bartlett said.
But ATC won’t benefit until 2018, he said, as the spectrum auction’s conclusion will not be seen until next year.
ATC issues its formal 2017 guidance in February, and the plan for the company engaged in the active acquisition of radio station towers is to turn up its stock buyback program, which was turned down in recent months as, Bartlett admits, his company was over-leveraged.
That situation will be helped by the increased need for ATC’s customers to invest in new infrastructure from the spectrum repack and from ATSC 3.0 adoption. This, in particular, will be necessary among the nation’s wireless communications carriers.
“More infrastructure is needed to handle all of that physical data,” he said. “It’s all good for the tower industry.”
ATC is now being covered by Wall Street investment firm Macquarie, and in its initiation of coverage Tuesday (12/6) gave it an “Outperform” rating, setting a conservative target price of $125.00.
The most recent finance house to give a rating on ATC shares is Deutsche Bank AG, which on Nov. 14 reiterated its “Buy” rating and set a target price of $135.