Barclays upgraded American Tower (AMT) and Crown Castle (CCI) to Overweight from Equal Weight, saying U.S. tower operators are priced at multi-year lows even though several factors could prompt a recovery in growth and market sentiment. The brokerage emphasized that valuations appear to already account for structural headwinds such as industry maturity, carrier consolidation and rising network efficiency.
The firm noted that tower stocks have notably lagged broader benchmarks this year, ranging from declines of about 1% to 16% while the RMZ REIT index posted a 17% gain. Barclays quantified the group valuation at roughly 15 times adjusted funds from operations per share - the lowest level in more than a decade - and said that current multiples more than reflect the sector's challenges.
On fundamentals, Barclays projects U.S. organic growth for tower companies to settle in the 4% to 5% range, driven by contractual escalators and reduced churn. The brokerage also left open the prospect that growth could reaccelerate after a weak second half of 2026 and into early 2027, rather than immediately rebounding from current levels.
Barclays identified a set of potential catalysts that could support a revaluation of tower shares. Among these are settlements related to claims against Dish/EchoStar, additional spectrum transactions, incremental network densification, share buybacks and the arrival of new wireless entrants that might increase demand for tower capacity. The firm further pointed to management commentary from major tower operators indicating 2026 will be the trough year for organic growth.
Specific company actions and guidance changes informed Barclays' analyst moves. For American Tower, the brokerage raised its rating to Overweight and nudged the price target to $198 from $195, citing expectations for stronger domestic leasing, continued international expansion and momentum at its CoreSite data center business.
For Crown Castle, Barclays upgraded the stock to Overweight while trimming the price target to $84 from $92. The firm judged concerns about satellite competition and slowing services revenue to be overstated, and said Crown Castle's streamlined, tower-focused strategy after its fiber divestiture - together with reduced leverage - could enable a rerating of the shares.
Barclays left its Overweight rating on SBA Communications intact but lowered the price target to $208 from $245, reflecting diminished expectations for industry consolidation. Even so, the brokerage described SBA's valuation as attractive and projected that growth will resume in 2028 as international churn moderates.
Overall, Barclays' repositioning reflects a view that downside risks are largely priced in and that several discrete catalysts could help reverse recent underperformance. Still, the firm framed its outlook with measured expectations about timing, pegging 2026 as the likely low point for organic growth across major tower operators.