SBA Communications stock rating downgraded by BofA on AT&T spectrum deal

Investing.com - BofA Securities downgraded SBA Communications (NASDAQ:SBAC) from Buy to Neutral on Wednesday, while reducing its price target to $230 from $260. The company, currently valued at $14.58 billion, operates with a significant debt burden, reflected in its debt-to-equity ratio of 1.53.

The downgrade follows AT&T’s announcement of an acquisition of EchoStar’s mid-band spectrum, which BofA Securities indicates will result in lower network densification efforts by AT&T in the near term.

BofA Securities cited "longer-dated industry catalysts" for domestic deployments and increased domestic and international churn in coming years as additional factors behind the rating change.

The firm also noted that SBA Communications has "fewer offsetting drivers, such as data centers and structural transformation opportunities" compared to peers American Tower and Crown Castle.

The new price target is based on an approximately 18.0x 2026 AFFO/share multiple, reduced from the previous 20.0x multiple, as BofA Securities views positive catalysts for SBA Communications as "longer-dated" following the AT&T/EchoStar announcement.

In other recent news, EchoStar Corporation reported its second-quarter 2025 earnings, revealing a revenue shortfall that surprised analysts. The company posted an earnings per share of -$1.06, slightly below the forecast of -$1.01. Revenue was reported at $3.72 billion, missing the anticipated $3.82 billion. Meanwhile, AT&T announced plans to acquire spectrum licenses from EchoStar, part of its strategy to enhance U.S. communications infrastructure. This deal is valued at approximately $23 billion. Additionally, T-Mobile and Elon Musk’s Starlink have shown interest in acquiring spectrum controlled by EchoStar, following the AT&T agreement. In another development, Sling TV, a subsidiary of EchoStar, introduced new short-term streaming options, including a $4.99 Day Pass for contract-free live TV access. These recent developments highlight significant activity and strategic moves within EchoStar and its subsidiaries.

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