The purpose of this thesis is to perform an equity valuation of Crown Castle Inc. (CCI), a major U.S.-based telecommunications infrastructure REIT. The primary goal is to estimate a 1-year target share price, leveraging a detailed analysis of the company's business model, industry dynamics, and prevailing economic conditions. After presenting widely used valuation techniques applied specifically to Real Estate Investment Trusts, the thesis conducts a thorough review of the internal and external factors influencing Crown Castle’s performance. This is supplemented by an extensive operational and financial analysis to pinpoint the key drivers of the company’s future growth and profitability. To estimate CCI's 1-year target price, three valuation models were utilized. The Net Asset Value (NAV) valuation yielded a target price of 152.69 USD, the Dividend Discount Growth Model (DDGM) resulted in a target price of 111.82 USD, and the relative valuation suggested a target price of 128.86 USD. Based on these findings and placing greater emphasis on the DDGM and the relative valuation results, I propose a target share price of 123.6 USD with a HOLD recommendation, The sensitivity analysis underscores the potential variability in the target price due to changes in key assumptions, emphasizing the need for cautious interpretation of the results and close attention to evolving market conditions.
Date of Award | 17 Oct 2024 |
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Original language | English |
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Awarding Institution | - Universidade Católica Portuguesa
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Supervisor | José Carlos Tudela Martins (Supervisor) |
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- Equity valuation
- Real estate investment trust
- Discounted dividend growth model
- NAV
- P/AFFO
- Mestrado em Finanças (mestrado internacional)
Crown Castle Inc.: equity valuation
Becságh, B. A. (Student). 17 Oct 2024
Student thesis: Master's Thesis