SBA Communications (SBAC) Stock Surges 19% — Is a Buyout Coming?

TLDR

• SBAC stock jumped as much as 18.93%, last trading around $194.53, after reports emerged that the company is exploring a potential sale.
• SBA confirmed it is working with advisers to review preliminary takeover interest from large infrastructure funds.
• Several analysts cut price targets ahead of the news, including Wells Fargo, JPMorgan, Scotiabank, and Morgan Stanley — consensus rating remains Hold with a $230.11 target.
• In its last earnings report, SBA beat EPS estimates ($3.47 vs. $3.25 expected), though revenue of $719.58 million slightly missed the $725.80 million consensus.
• SBA also raised its quarterly dividend to $1.25 (annualized $5.00), up from $1.11, yielding around 2.6%.

SBA Communications (SBAC) is currently trading around $194.53, up sharply from its prior close of $171.56.

SBA Communications Corporation, SBAC

SBA Communications (SBAC) stock shot higher on Wednesday after reports surfaced that the tower company is exploring a potential sale, including takeover interest from large infrastructure funds.

The stock climbed as much as 18.93% intraday. It last traded around $194.53, up from a prior close of $171.56. Volume came in lighter than usual, with around 524,666 shares changing hands — roughly 44% below the average session volume.

SBA confirmed it is working with advisers to evaluate the preliminary interest. The formal review signals that serious bidders could be in the picture, which drove bullish sentiment through the session.

Any deal backed by infrastructure funds is being viewed as potentially coming at a premium valuation, adding fuel to the move.

The stock had been under pressure heading into this news. Year-to-date, SBAC was down around 10.7% before today’s move.

Analyst Targets Had Been Coming Down

Several analysts had trimmed their price targets on SBAC in recent months. Wells Fargo cut its target from $205 to $195, setting an “equal weight” rating. JPMorgan lowered its target from $245 to $240 with a “neutral” rating. Scotiabank moved from $233 to $223 at “sector perform,” and Morgan Stanley went from $225 to $215 at “equal weight.”

Most recently, Truist initiated coverage with a “hold” rating and a $193 price target. The consensus across analysts sits at a Hold rating with a mean price target of $230.11.

The stock’s 50-day moving average stood at $187.32 and the 200-day at $190.97, both of which today’s pop has cleared.

SBA’s last quarterly earnings, reported February 26, came in at $3.47 EPS — beating the $3.25 consensus by $0.22. Revenue of $719.58 million came in just under the $725.80 million estimate. Revenue was up 3.7% year-over-year.

Dividend Raised Ahead of the News

SBA also raised its quarterly dividend recently, lifting it from $1.11 to $1.25 per quarter. That’s an annualized $5.00, putting the yield at around 2.6%. The dividend was paid on March 27, with a record date of March 13.

The company’s payout ratio currently stands at 52.47%.

Institutional investors hold 97.35% of SBAC’s outstanding stock. Among recent moves, Geneos Wealth Management lifted its stake by 105% in Q1, adding 84 shares to bring its total to 164 shares.

SBA has a market cap of around $20.72 billion and a price-to-earnings ratio of 20.59.

Analysts currently forecast the company will post $12.57 EPS for the full fiscal year.

The post SBA Communications (SBAC) Stock Surges 19% — Is a Buyout Coming? appeared first on CoinCentral.